Leading banks including the likes of SBI, BOB, PNB and 2 others are expected to go for share sale in the second half of the ongoing fiscal year. This is in a bid to expand their capital base in the wake of coronavirus induced economic stress.
For the share sale, banks are likely to tap the QIP route and sell their shares to institutional investors and the call on the same shall likely be taken after the finalization of the second quarterly results, said sources from the merchant banking division.
In accordance with the sources, by October end, banks will draw a better idea about their non-performing assets NPAs, one-time loan restructuring and resultant ratings. Post which they can initiate on the process of taking a decision on the timing, amount as well as appoint merchant banks and carry out other formalities.
Banks such as SBI, PNB, BOB and Union Bank will look to mop up capital towards the end of third quarter or in the fourth quarter, sources added. Also, the capital raising has to be planned in a way such that both domestic as well as foreign investors get a chance to be part of the several QIPs.
Likewise PNB has already put across its aim of raising funds and hitting the capital markets for meeting expansionary and other regulatory needs. "We will be planning (capital raising) somewhere around the end of third quarter or beginning of fourth quarter. By this time, we would have declared two quarterly balance sheet of the amalgamated entities," PNB Managing Director S S Mallikarjuna Rao told PTI in June.
Already some of the top public sector banks including ICICI Bank, Axis Bank and Kotak Mahindra have mopped up capital via the QIP route in the last 3 months.
And ahead of the capital raising move, most of the public run banks have already secured shareholders' nod for raising capital via a combination of debt and equity instruments in the ongoing fiscal year.