New Delhi: Shareholders of IDBI Bank have given it nod to raise up to Rs 28,000 crore from a mix of equity and bonds.
At the annual general meeting of the bank held last week they approved an enabling resolution for issue of shares aggregating up to Rs 8,000 crore inclusive of premium amount through various modes including Qualified Institutional Placement (QIP).
Besides, shareholders have also given go-ahead for mobilisation of one or more tranches of up to Rs 20,000 crore, comprising bonds by way of private placement or public issue, IDBI Bank said in a regulatory filing to the stock exchanges.
The government last December gave approval to IDBI Bank for raising Rs 3,771 crore during the year, by way of QIPs -- a move which will dilute its holding by about 26 percent in the lender. The government's holding in the bank stands at 73.98 percent as on date.
As per the existing norms, the government equity in a public sector bank cannot go below 52 percent to maintain the character of state-owned banks.
Finance Minister Arun Jaitley had last year indicated a change in the characteristics of IDBI Bank wherein the government would own a majority stake but, at the same time, keep the bank at arm's length.
Citing the example of Axis Bank, he had wondered if IDBI Bank could follow the same model. The government indirectly controls 29.19 percent in Axis Bank through the administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), the Life Insurance Corp and four other public sector general insurance companies.
IDBI Bank came into existence with Parliament passing the IDBI Repeal Act in 2003. In terms of provisions of the Act, IDBI has been functioning as a bank in addition to its earlier role of a financial institution.
The AGM, held on July 22, also gave approval for raising the authorised share capital of the bank from Rs 3,000 crore to Rs 4,500 crore.
Published Date: Jul 25, 2016 17:31 PM | Updated Date: Jul 25, 2016 17:31 PM