State-run banks defers QIP issue on uncertain market conditions

State-run banks defers QIP issue on uncertain market conditions
Public sector banks are likely to wait for another few months to raise fund through qualified institutional placement (QIP), which already had been delayed last year due to weak market conditions, reported PTI.

Banks say they want to gauge market conditions as well as investor appetite post-elections before raising funds through the QIP route.

"Markets are still not conducive for QIPs. We will be looking at raising the money only after June," Dena Bank executive director RK Takker media.

Indian Overseas Bank, which got the board approval to raise Rs 350 crore last December, said it will require 3-4 months for selling its shares through QIP.

Another state-run lender IDBI Bank said the bank plans to raise some money via QIP route, but not in the first quarter months.

However, the analysts believe that although the market condition this fiscal is better than last year, valuation of shares of banks are still below their book value and if they plan it now the issue will be much more diluted.

"Post-elections, a turnaround is likely. Probability of banks' coming out with QIP issues from June onwards seems more," said Angel Broking's banking analyst Vaibhav Agrawal.

Read more about: psu banks
Story first published: Monday, May 5, 2014, 9:20 [IST]
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