The share price of Punjab National Bank (PNB) fell 5 percent on Tuesday after the public sector lender launched a qualified institutional placement (QIP) offer to raise funds.
The bank is looking to raise as much as Rs 1,800 crore from institutional investors through this offer and it has fixed a floor price of Rs 35.51 for the same.
The bank may at its discretion offer a discount of not more than 5 percent on the floor price, it said.
The stock fell as much as 5.1 percent to its day's low of Rs 33.75 per share on the BSE.
This is the second time the state-owned bank has hit the market to raise funds from institutional investors in the last six months.
The board had given nod for mobilising Rs 7,000 crore from QIP in one or more than one tranches. Of this, the bank had raised Rs 3,788.04 crore from QIP in December following which the government holding in the bank came down from 85.59 percent to 76.87 percent.
PNB further said that a meeting of the Capital Raising Committee is scheduled to be held on Friday, May 14, 2021, to consider and determine the issue price, including a discount if any, for the shares to be allotted to eligible qualified institutional buyers.
The issue price will be determined by the bank in consultation with the book running lead managers appointed for the QIP issue, it said.
“Subject to compliance with applicable laws, our Bank intends to utilize the Net Proceeds towards (i) augmenting our Bank’s Tier I Capital to meet the Basel III and to support growth plans and to enhance the business of our Bank; and/ or, (ii) general corporate requirements or any other purposes," the BSE filing said.