Punjab & Sind Bank shares soar 13% after setting floor price for QIP

Shares of Punjab & Sind Bank advanced over 13 per cent on Tuesday after it fixed the floor price of ₹40.38 per share to raise funds via Qualified Institutional Placement (QIP).

 

Punjab & Sind Bank's stock rose as much as 13.08 per cent during the day to ₹50.5 per share, the biggest intraday gain since January 14 this year. The stock pared gains to trade 7.8 per cent higher at ₹48.18 apiece, compared to a 0.31 per cent advance in Nifty 50 as of 10:40 AM. 

 

Shares of the company extended gains to their sixth day while they have fallen 1.29 per cent this year, compared to a 0.7 per cent rise in the benchmark Nifty 50. The stock of the lender has risen over 25 per cent since hitting a low of ₹36.9 in early March. Punjab & Sind Bank has a total market capitalisation of ₹32,269.04 crore. 

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The board in its meeting approved and adopted the preliminary placement document, together with the application form in connection with the QIP issue, Punjab & Sind Bank said in a regulatory filing on Monday. In its February 2024 board meeting, the lender approved raising ₹2,000 crore through issuing security.  

 

The board also approved the floor price of the issue at Rs 40.38 based on the pricing formula as prescribed by Sebi regulations, it added. The bank may offer a discount of not more than 5 per cent on the floor price so calculated for the issue, it said.

 

With the QIP, the government holding in the bank would come down 3-4 per cent and the capital adequacy ratio would rise at the end of March 2025, Managing Director and Chief Executive Officer Swarup Kumar Saha told PTI earlier. The government of India holds a 98.25 per cent stake in Punjab & Sind Bank at the end of December 2024.  

 

The bank's board had already approved a capital mop up of ₹10,000 crore, including ₹5,000 crore as infrastructure bonds, ₹2,000 crore as QIP and the remaining ₹3,000 crore as Tier-1 or Tier-2 bonds for the current fiscal.

 

During the third quarter ended December, 2024, Punjab & Sind Bank reported a more than two-fold jump in its net profit to ₹282 crore in the December 2024 quarter as bad loans declined. The bank had earned a net profit of ₹114 crore in the same quarter a year ago. The bank's total income increased to ₹3,269 crore during the quarter under review, as against ₹2,853 crore in the same period last year.