Indian Bank Shares Surge as QIP Launches at Rs 4,000 Crore with a Floor Price of Rs 414.4 Apiece

Key Points:

1. Indian Bank initiates a qualified institutional placement (QIP) of up to Rs 4,000 crore.
2. The floor price for the QIP is set at Rs 414.4 apiece, representing a 5.2 per cent discount to the previous close.
3. The share price of Indian Bank surges by three per cent, reaching Rs 450.7 apiece on NSE.
4. The board will meet on December 15 to determine the final issue price of equity shares.
5. Indian Bank, incorporated in 1907, has seen its global business exceed Rs 11.33 lakh crore in Q2 FY24.

Indian Bank, the Chennai-headquartered public sector bank, witnessed a surge in its share price on Wednesday following the announcement of a qualified institutional placement (QIP) worth up to Rs 4,000 crore at a floor price of Rs 414.4 apiece. The move aimed at capital infusion propelled the stock of Indian Bank, causing it to gain as much as three per cent and reach Rs 450.7 apiece on the National Stock Exchange (NSE). This price is just Rs 12.35 short of the 52-week high recorded in mid-November.

The floor price for the QIP represents a 5.2 per cent discount to the previous closing price. The anticipation surrounding the issue’s pricing led to heightened investor interest in the bank’s shares. The company’s board is scheduled to convene on December 15 to deliberate on the final issue price of equity shares.

In a regulatory filing, Indian Bank stated, “Committee of Directors (Capital Raising) (“Committee”) of the Bank is scheduled to be held on December 15, 2023, inter alia, to consider and approve the Issue Price of Equity Shares, to be issued and allotted pursuant to the proposed Qualified Institutions Placement of Equity Shares of Rs.10.00 each, including discount on the Floor Price, if any, calculated in accordance with the SEBI ICDR Regulations and approved by the Shareholders pursuant to a Special Resolution dated June 19, 2023.”

The bank, incorporated on March 5, 1907, with an authorized capital of Rs 20 lakh, commenced its operations on August 15, 1907. As of Q2 FY24, Indian Bank’s global business surpassed Rs 11.33 lakh crore.