Private sector lender RBL Bank Ltd on Monday said that it is raising funds from institutional investors through a so-called qualified institutional placement (QIP) offering, the bank said in a filing with stock exchanges.
QIP is a tool used by listed companies to sell shares, debentures, or any securities, other than warrants that are convertible into stocks, to a qualified institutional buyer such as mutual funds and foreign institutions. A source had told Mint at the time that the fund raising will be a combination of preferential issue, along with a QIP for public market investors.
RBL said its board had approved a floor price of ₹352.57 apiece for the share sale. On Monday, RBL Bank shares closed at ₹373.25 per share, down 0.15%.
Mint reported on 25 November that RBL was planning to raise funds through the QIP route.
The QIP fundraising follows RBL’s Saturday announcement that it will raise ₹825.79 crore by way of preferential allotment to five investors – Bajaj Finance Ltd, foreign institutional investors East Bridge Capital Master Fund I and FEG Mauritius FPI Ltd, along with Ward Ferry Management Ltd-managed hedge fund WF Asian Reconnaissance Fund and Asia-focused stock hedge fund, lshana Capital.
These fundraising exercises follow RBL Bank’s announcement to shareholders at its annual general meeting on 9 July that it would raise equity capital not exceeding ₹3,500 crore.
Between July-September, the bank’s asset quality also worsened as its gross non-performing loans jumped 95% to ₹1,539 crore from ₹789.21 crore in the same period last year.
As a percentage of total loans, its gross bad loans ratio nearly doubled to 2.6% from 1.38% during the period while profit fell 73% to ₹54 crore. That put the bank’s stock under pressure as it tanked from a 52-week high of ₹716.40 on NSE in May this year to a 52-week low of ₹230.55 on 23 October.
This article was first published on livemint.com.