Punjab National Bank's Rs 1,800 crore QIP opens; shares tank

NEW DELHI: Punjab National Bank (PNB) shares tanked as much as 5 per cent on Tuesday as the state-run lender's board approved raising of equity capital from qualified institutional investors to enhance its capital base.

PNB lender is looking to raise up to Rs 1,800 crore by selling shares, about 44 per cent of its targeted fund raising announced earlier.

The scrip fell 5 per cent to Rs 33.75 in early trade on Tuesday, but later recovered to close at 1.4 per cent down at 35.10 on BSE.


For the QIP, the bank has fixed the floor price at Rs 35.51 per equity share, which is near to its previous close. The PNB board approved the floor price and the launch of the issue at its meeting on Monday.

Banks are looking to shore up their capital to absorb the fresh slippages amid the raging second wave of the coronavirus pandemic.

PNB's issue worth Rs 1,800 crore includes an option to retain oversubscription up to Rs 600 crore, a senior bank executive said.

The capital raising committee of the state-owned bank will meet again on May 14 to consider and determine the issue price, including up to 5 per cent discount on the floor price, the bank said in a regulatory filing.

PNB had raised Rs 3,788 crore through QIP in December last year.