MUMBAI: Axis BankNSE 6.60 % Ltd. on Friday raised Rs 12,500 crore through an institutional share sale, which would improve its capital base and help to increase its lending to borrowers
A group of large foreign and domestic institutional investors have participated in the Axis Bank’s institutional qualified placement, which closed earlier in the day.
Those foreign institutional investors include Norges, Lazard, Dodge & Cox, Nomura, market sources told ET. Domestic fund houses including SBI, Aditya Birla, Reliance, ICICI Prudential, HDFC, SBI, along with other insurance companies such as HDFC Life, SBI Life, Reliance Life too invested in the issue.
This is one of the largest QIPs by a private sector entity, which drew interest from top institutional investors, sources said.
Axis Bank did not reply to ET’s email while individual investors could not be contacted for comment till press-time.
“The issue was well received. The bank had set a floor price at Rs 661.50 per share. Domestic mutual funds and US-based funds have participated in the issue with a lot of interest,” said an executive with direct knowledge of the matter.
Some investors obtained those securities at Rs 640 or Rs 622 per share, sources said. LIC and GIC, the two promoter insurance companies of the bank, have also put more money through a preferential issue to keep their stakes at the current levels.
They wanted to raise a minimum of Rs 10,000 crore with the option of raising another Rs 2,500 crore. “With LIC and GIC, the total sum (fund raised) would be close to Rs 15,000 crore,” said another person involved in the deal.
In July, Axis Bank had said its board had approved to raise up to Rs 18,000 crore through the issue of equity shares, depository receipts or convertible securities.
The private sector lender appointed Axis Capital, Citi, JPMorgan, BNP Paribas, Credit Suisse, UBS and HSBC as its bankers.
In November 2017, Axis Bank had raised over Rs 11,500 crore in a share and warrants sale to Bain Capital, Capital International, and the lender’s biggest shareholder, LIC.
Axis Bank’s Tier-I capital adequacy ratio, a gauge for capital strength stood at 12.9 percent in the April-June quarter this year. Its total capital adequacy was at 16.06 percent during the same period. With the latest round of fund raising both the measures will improve.
In past one month Axis shares increased more than 1 per cent to close at Rs 680.70 compared with 3 per cent rise in BSE Bankex. The bank is said to be focussing more on retail business now.