Punjab National Bank Launches QIP To Raise Up To Rs 7,500 Crore

Punjab National Bank, the country's second-largest state-run lender, on Monday announced the launch of its qualified institutional placement to raise up to Rs 7,500 crore.

The capital raising committee of the lender, in a meeting held on Monday, "authorised the opening of the issue today, i.e. 23.09.2024 and approved the floor price of the Issue, being Rs. 109.16", an exchange filing stated.

The floor price for the QIP has been fixed as Rs 109.16 per share, which marks a discount of 2.1% as against the stock's current market price of Rs 111.51.

Through the QIP, Punjab National Bank will offload a total of 24.09 crore equity shares, with a possible upsize of up to 48.19 crore equity shares.

This takes the base offer size to around Rs 2,500 crore, with the option to raise an additional Rs 5,000 crore.

Motilal Oswal Investment Advisors Ltd., ICICI Securities Ltd., IDBI Capital Markets & Securities Ltd., and IIFL Securities Ltd. are among the lead managers to the issue.

Notably, Punjab National Bank had secured the nod from its board of directors in Dec. 2023 to raise up to Rs 7,500 crore in fiscal 2024–25 in one or more tranches through QIP, follow-on public offer, or any other mode or combination thereof.

The fundraise plan had received approval from the lender's shareholders at the extraordinary general meeting called on March 5.

The announcement related to the QIP's launch was made by Punjab National Bank after the market hours. The bank's shares had settled 2.86% higher at Rs 111.51 apiece on the NSE, compared to a 0.57% climb in the benchmark Nifty 50.

Year-to-date, the stock has risen by 16.5%, whereas the surge has been sharper at 43.8% in the past 12 months. The relative strength index currently stands at 43.3.

Six out of the 18 analysts tracking the company have a "buy" rating on the stock, five suggest a "hold" and seven have a "sell", according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 45.6%.