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IDBI bank to raise 3771 crores through QIP

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

IDBI Bank

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