Punjab National Bank launches up to $777 million share sale

MUMBAI: Indian state-run Punjab National Bank has launched a share sale to qualified institutions to raise at least Rs 3,000 crore ($466.2 million) with an upsize option for another Rs 2,000 crore, according a source and a deal term sheet.

Punjab National Bank, the second-biggest state-run lender in the country, is looking to sell the shares at an indicative price of Rs 168 each, according to the source and the term sheet.

The stock closed at Rs 172.95 on Monday.

The total fund-raising of Rs 5,000 crore, including the upsize option, is aimed at boosting the bank's capital ratio.

India's state-run banks are raising funds as part of a recapitalisation plan in which New Delhi will inject Rs 1.35 lakh crore through recapitalisation bonds, while the lenders are required to raise on their own about Rs 58,000 crore rupees.

Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC, Kotak Mahindra Capital, Morgan Stanley and PNB Investment Services are the banks managing the sale.