IDBI Bank to raise Rs 5,294 crore from share sale

State-owned IDBI Bank said it would raise up to Rs 5,294 crore from various means, including share sale to government and LIC.

The board of the bank in its meeting today fixed issue price of Rs 112.99 per share for preferential issue of shares, IDBI Bank said in a statement.

The board has proposed to issue 18.85 crore equity shares of Rs 10 each at a price of Rs 112.99 per share aggregating to Rs 2,130.50 crore upon conversion of Tier I Bonds held by the government of India in the bank into equity, it said.

At the same time, it said, the bank would issue up to 22.12 crore shares at a price of Rs 112.99 per share aggregating to Rs 2,500 crore to the government.

Besides, the bank would issue up to 5.86 crore equity shares of Rs 10 each at a price of Rs 112.99 per share aggregating to Rs 662.79 crore to Life Insurance Corporation of India (LIC), it said.

Shares of IDBI Bank closed at Rs 112.35 a piece, up 2.65 per cent on the BSE.

The fund raising would be subject to the approval of the shareholders and regulatory authorities, it said.

The plans to take shareholders approval on March 28, it added.

Last year, the Mumbai-based bank got capital support of Rs 3,119.04 crore from the government.

In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks.

Most of the public sector banks got capital support from the government last fiscal. These banks included Bank of Baroda, Union Bank of India, Oriental Bank of Commerce, UCO Bank and Dena Bank.

Source: EconomicTimes