IDBI Bank falls 19% on the listing of fresh shares allotted to QIBs

IDBI Bank shares invested 19 percent to Rs 30.80 on the BSE in the morning trading on Tuesday after listing 371.8 million shares in QIBs according to a set of qualified institutions (QIPs). The stock traded lower on the fourth straight day, down 27 percent during the period.

The Committee, at its meeting held on Saturday, December 19, 2020, approved the issuance and allocation of 371.8 million shares in 44 eligible QIBs at a cost of issuing Rs 38.60 per equity share, including Rs 1435.18 crore. The bank issued the shares after offering about a 5% discount on the minimum price of Rs 40.63 per equity share.

The bank intended to increase Rs 2,000 crore (base size Rs 1,000 crore with green shoe option Rs 1,000) with the QIP crisis which opened on December 15 and closed on December 18.

The bank mentioned that investors allocated more than five percent of the shares in the QIP issue where Punjab National Bank(20.9 percent of subscription), Bank of Baroda(13.9 percent), State Bank of India(13.9 percent), Indian Bank (6.97 percent), Canara Bank (6.97), and Societe Generali-ODI (5.66 percent). This clearly shows how IDBI Bank is lagging behind all other banks. In total it is a fall of 19 percent

In another development, the lender said on Monday it had the opportunity to receive $ 1.5 billion in equity from its Life Insurance Corporation of India (LIC). Rakesh Sharma, MD, and CEO say LIC share allocation has decreased (down below 51 percent) after QIP, so the bank could take up to Rs 1,500 crore capital from LIC.LIC withholds a share of 51% before QIP. After the QIP, the LIC pole entered the expanded capital, enabling the LIC to incorporate additional alignment to the 51 percent level.

At 09:46 am, IDBI Bank was trading a 17 percent lower of Rs 31.45 on the BSE, compared to a 0.80 percent decline in the S&P BSE Sensex. The combined budget of 9.7 million has changed hands over the counter on the NSE and BSE.


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