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IDBI Bank appoints 7 investment bankers for nearly Rs 4,000-cr QIP issue

PTI     January 8, 2016

State-run lender IDBI Bank has appointed seven merchant bankers, including Deutsche Bank, Credit Suisse and SBI Caps, for its proposed Rs 3,800-crore QIP issue.

Without naming the investment-bankers, IDBI Bank deputy managing director BK Batra confirmed to PTI that they have finalised the merchant bankers for the deal.

Other bankers are Bank of America Merrill Lynch, HSBC India, Citigroup and IDBI Capital Markets, sources said.

The government on December 31 had allowed the bank to raise Rs 3,771 crore through a QIP route.

The IDBI scrip tanked 6.4 per cent to Rs 77.80 on the BSE today on a day when the market was roiled by the deepening crisis in the Chinese economy. The stock is down over 18 per cent from its 52 week high of Rs 95.70. As of today, the bank had a market cap of Rs 14,783 crore.

In spite of this, a merchant banker expressed confidence that the sale could go through, adding if the market improves it could be a USD 600 million sale.

Earlier this month the bank had raised Rs 1,900 crore of secondary debt by selling Basel III compliant bonds on private placement basis in two instalments.

The first issue of Rs 1,000 crore concluded on December 31 was for a tenor of 15 years with call option at the end of 10 years and the second issue of Rs 900 crore was concluded on January 2 with a tenor of 10 years.

The government holds 76.50 per cent in the infra-lender converted universal bank as of the September quarter, which has for long been struggling with rising bad loans amid low credit growth.

In the September quarter, it had reported a flat net profit at Rs 120 crore as its net bad loans rose to 3.16 per cent from 2.79 per cent, while gross non-performing loans rose to 6.92 per cent from 5.72 per cent, jacking up its provisions to Rs 1,399 crore from Rs 1,078 crore last year.

In FY15, the bank had reported an over 22 per cent dip in profit at Rs 873.4 crore over the previous fiscal on an operating profit of Rs 5,752 crore.

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