IDBI bank to raise 3771 crores through QIP

SEBI has given its nod to IDBI bank to raise capital of 3771 crores by issuing shares through Qualified Institutional Players.

Flash points

• IDBI(Industrial Development Bank of India ) sought SEBI’s approval to raise capital by issuing equity shares
• SEBI approved to raise capital around 3771 crores through QIP model
• This move will dilute the government shares significantly
• Currently government holds around 16% shares in IDBI bank
• 3771 crores account for 6% share in IDBI bank
• SEBI also told that the section 82 (c), ICDR regulations does not apply to IDBI
• This corresponds to the regulation 113 of SEBI
• According to the current regulations if the government stake goes below 52% then the bank would lose its public sector status
• Finance minister Arun Jaitley suggested that IDBI can follow the Axis bank model
• In Axis bank the government holds 29.19% share indirectly through SUUTI(Specified Undertaking Of The Unit Trust Of India)
• In December 2015, government has infused 2229 crores in IDBI bank under preferential allotment of shares

Points to note

• Government has infused around 20,088 crores in 13 public sector banks including SBI,PNB,IDBI,Bank of Baroda and Canara bank
• The market capitalization of IDBI stands at 10,583.30 crores
• The 52-week high of the share was 95.70 and low was Rs.47.40
• The latest book value of the company is Rs 79 per share
• IDBI Chairman – S Raghavan & MD & CEO – Kishor Kharat