IndusInd Bank mops up Rs 2,000 cr via QIP route

Tags: News

Bank issues 5.21 cr new shares constituting 9.98% dilution

Hinduja group promoted IndusInd Bank has raised Rs 2,000 crore through a qualified institutional placement (QIP) to support forecasted growth and augment its total capital adequacy ratio.

The bank issued 5.21 crore new equity shares, constituting 9.98 per cent dilution at a price of Rs 384 per share. The QIP however was at a discount of almost 6.77 per cent to the closing share price on the bourses.

Romesh Sobti, MD and CEO, IndusInd Bank said, “Although the bank is already well capitalised, this equity raising will ensure that its growth continues apace; we are very happy with the quality of book generated and the spread of investors that have shown confidence.”

“The promoter holding which was 19.38 per cent as September 30, has fallen to 17.44 per cent following the QIP issue as ESOPs have also been exercised,” said a senior official of the bank.

This is the third qualified institutional placement (QIP) issue by the bank this far. The bank had previously raised money through QIPs in August 2009 and September 2010.

“The QIP issue received a response from high quality FIIs as well as domestic investors,” the bank said in a statement.

Morgan Stanley India, JM Financial Institutional Securities, CLSA India and HSBC Securities and Capital Markets (India) were the joint global coordinators and book running lead managers to the QIP issue.

A report from Kotak Institutional Equities said, “The recent capital infusion has increased the bank’s overall tier-I ratio to 15.5 per cent from 11 per cent in September. We see limited concerns on growth (post the strong dilution) as the current capital should be comfortable to expand balance sheet at more than 20 per cent CAGR in the medium term.”

“Promoters’ share has declined to 17 per cent from 19 per cent in September but higher than 10 per cent as mandated by RBI. However, a combination of Esop dilution and possibility of RBI allowing promoters to keep their stake at 15 per cent should give some comfort from further dilution. We expect NIM to improve by more than 30 basis points by financial year 2014,” added the report.

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