PNB raises Rs5,000 cr from institutional investors to bolster capital

Punjab National Bank (PNB) has raised Rs5,000 crore through allocation of around 481.9 million shares to qualified institutional investors, the state-owned lender said on Friday.

The allocation was made at Rs103.75 per share, ie, at a discount of 4.96 per cent to the Rs109.16 floor price set by the lender. The issue closed on 26 September.

The qualified institutional placement (QIP), which opened on 23 September, attracted bids to the tune of Rs41,734 crore against the issue size of Rs2,500 crore, or about 8.3 times the offer.

Bidders included mutual funds, foreign portfolio investors (FPIs), and insurance companies.

PNB decided to use the option of keeping an extra Rs2,500 from the bid amount, which, it said, will help strengthen its tier 1 capital and reinforce its lending capacity.

PNB reported a 10.2 per cent year-on-year increase in its net interest income to Rs10,476.2 crore in the first quarter (April- June 2024-25) of the current financial year, against Rs9,504.3 crore in the previous year quarter, as per the bank’s financial results released on 27 July. 

Net profit of the public sector lender for fiscal first quarter rose nearly 160 per cent to Rs3,251.5 crore from Rs1,255.4 crore in the corresponding quarter of the previous financial year.

Total income for Q1 2024-25 increased to Rs32,166 crore from Rs28,579 crore in the year-ago quarter. 

While PNB’s net non-performing asset (NPA) ratio stood marginally higher at 0.82 per cent for Q1 2024-25 compared to 0.77 per cent in the previous quarter (January-March 2023-24) net NPA in absolute terms were lower at Rs5,930 crore against Rs6,798.8 crore in the quarter ended March 2024.