State-owned IDBI Bank today said it plans to raise Rs 2,800 crore from foreign investors or public offer, a move that will bring down the stake of the government in the lender.
“The board of the bank at its meeting held on November 4, has granted in-principle approval to raise equity capital for an aggregate amount not exceeding Rs 2,800 crore including premium) through Qualified Institutional Placement route (including 144A issue and/or Reg S issue) and/ or Further Public Offer (FPO),” the bank said in a statement.
The government holding in the bank is 76.5 per cent at the end of June.
Finance Minister Arun Jaitley had hinted a change in the characteristics of IDBI Bank where government would have a majority stake, but at the same time maintain an arm’s length distance.
Citing the example of Axis Bank, he had wondered if IDBI Bank can follow that model.
The government indirectly controls 29.19 per cent in Axis Bank through the administrator of the Specified Undertaking of the Unit Trust of India (SUUTI), the Life Insurance Corp and four other public sector general insurance companies.
With regard proposal to bring down government’s stake in IDBI Bank, Minister of State for Finance Jayant Sinha had said, it is work in progress.
“As far as IDBI Bank is concerned, the Finance Minister has laid out what the direction is going to be. We are continuing to work as far IDBI Bank is concerned” he had said.
Shares of IDBI Bank closed at Rs 84.80, up Rs 0.24 per cent on the BSE.