PNB plans to raise Rs7,500 crore via QIP or FPO

The board of directors of Punjab National Bank (PNB) at its meeting on Thursday approved a proposal to raise Rs7,500 crore capital through equity issue via Qualified Institutional Placement (QIP) or Follow-on Public Offering (FPO).

The fundraising exercise will be done through the QIP or FPO route or any other permitted mode or a combination, in one or more tranches during the next financial year, the state-owned bank said in a late-evening regulatory filing.

PNB had a capital adequacy ratio of 15.09 per cent with Common Equity Tier 1 (CET1) of 10.23 per cent at the end of September 2023. 

Earlier this week PNB raised Rs1,153 through private placement of debt securities - Basel III Compliant Additional Tier-I Bonds - at a coupon of 8.55 per cent. These bonds, which qualify as Tier-I capital, have a face value of Rs1 crore each.

The PNB board had earlier approved a proposal to raise Rs12,000 crore this fiscal. Of this, PNB has so far raised Rs6,090 crore, including Rs3,000 crore AT-1 bonds and Rs3,090 crore in Tier-II capital.

Government of India held 73.15 per cent stake in PNB, with public shareholders holding 26.85 per cent as of 30 September 2023, according to the bank’s filing with the BSE. 

With a first half profit of Rs3,000 crore, PNB expects to close the current fiscal with profits of at least Rs6,000 crore, against the earlier guidance of Rs4,000 crore. 

On the asset side, PNB is looking to bring down GNPA to 6 per cent by end March 2024 and net NPA to below 1 per cent by the end of this fiscal.

The bank is targeting recoveries of Rs22,000 crore this fiscal, of which it has already recovered Rs11,000 crore.