Punjab National Bank raises Rs5,000- cr in share sale
12 Dec 2017
Punjab National Bank (PNB), the country's second-biggest state-run lender, quietly raised Rs5,000 crore (about $777 million) from a share sale to institutional investors, sources close to the transaction said.
PNB, which offered new shares at Rs168 each in an initial sale of Rs3,000 crore fully exercised an option to absorb an additional Rs2,000 crore offered by investors.
The share sale was at a 4.7 per cent discount to the Rs176.35 floor set by PNB's board and a 2.8 per cent discount to the stock's closing price on Friday.
The issue was subscribed to by about 50 local and foreign investors, one of the sources said. Local investors led by Life Insurance Corporation of India (LIC) got 75 per cent of the shares on offer with LIC securing a major portion of that, source said.
The sale comprises about 14 per cent of the bank's outstanding equity. PNB stock closed 0.4 per cent higher in a Mumbai market that fell 0.8 per cent.
State-run banks in India are raising funds as part of a recapitalisation plan in which the government will inject Rs1,35,000 crore through recapitalisation bonds, while the lenders are required to raise on about Rs58,000 crore on their own.
Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC, Kodak Mahindra Capital, Morgan Stanley and PNB Investment Services were managers to the sale.
Earlier this year, the country's largest lender State Bank of India (SBI) raised about Rs15, 000 cores from a share sale to investors, while at least two other state-run lenders Union Bank of India and Bank of Maharashtra recently raised funds by selling shares.
