IDBI Bank on Wednesday (15 July 2020) said it will raise up to Rs 11,000 crore equity capital through various modes in about a year to strengthen its capital base.
IDBI Bank said it will seek consent of shareholders in the AGM to offer, issue and allot such number of equity shares of the face value of Rs 10 each and aggregating up to Rs 11,000 crore, in one or more tranches.
The issuance of shares will be including but not limited to one or more of the existing shareholders/members, employees of the bank, qualified institutional buyers (QIBs) by way of public issue, rights issue or private placement, it added.
The lender will seek approval from shareholders for the proposal in the upcoming annual general meeting (AGM) on 17 August 2020.
IDBI Bank is required to maintain its Tier I capital in accordance with the relevant regulatory guidelines issued from time to time. In view of ongoing implementation of Basel III norms and consequential capital charge, there is a need to increase the capital to further strengthen the capital adequacy ratio.
The scrip was down 2.63% to Rs 38.85 on the BSE. It traded in the range of Rs 38.40 and Rs 40.50 in early trade.
After reporting a net loss for last 13 quarters, IDBI Bank returned to profit in the fourth quarter of the financial year 2019-20.
The bank reported a net profit of Rs 135 crore as against net loss of Rs 4918.44 crore in Q4 March 2019. Total income rose 4.7% to Rs 6924.94 crore in Q4 March 2020 from Rs 6616.06 crore in Q4 March 2019.
IDBI Bank offers a wide range of products from savings and current bank account to loans for retail and MSME customers or agri-loans to farmers.
As on 31 March 2020, the Government of India holds 47.11% stake, while Life Insurance Corporation of India held 51% stake in the IDBI Bank.
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