Axis bank raises Rs3464 crore through QIP, GDRs

Axis Bank, India's third largest private lender, has raised $720 million (Rs3,464 crore) through qualified institutional placements as well as global depository receipts. Its QIP-cum-GDR issue was priced at Rs906.70 per share. This has led to equity dilution of 11 per cent.

The issue opened pn Thursday. The proceeds from this fund will be essentially used for growth capital for the next few years and also for some of the ancillary businesses, which includes AMC and the PE business. Largely, it will take care of the Bank's growth for the next couple of years and it will also enable the bank to maintain its tier-I capital at over 9 per cent, according to a CNBC-TV18 report.

The company declined to comment on the matter, citing regulatory reasons. But "The demand was overwhelming," according to a Reuters source close to the developments. "As we speak Asian funds are enquiring, but we have to turn them down as the book has closed."

The $600 million share sale, with a greenshoe option of another $120 million, attracted demand for as much as $900 million when the book closed on Thursday night, the sources said.

The shares were placed at Rs906.7 each, which is a 0.5 per cent discount to the stock's close on the Mumbai exchange on Thursday. Three quarters of the Axis Bank offering would be allocated to qualified institutional investors, with the remainder raised through global depositary receipts.

The bank had passed an enabling resolution that will allow the bank to raise up to 20 per cent of the present paid up capital or 7.14 crore equity shares. However it has diluted just more than half the proposed stake.

The bank has obtained approval from its shareholders through a postal ballot for issuing not more than 7.14 crore equity shares by way of GDR/ QIP/ preferential allotment.