On Monday, IDBI Bank plans to increase the equity capital by issuing shares to the institutional investors including the Life Insurance Corporation of India through Qualified Institutional Placement (QIP) in the fourth quarter. The government announced plans to infuse the equity capital of Rs 555 crore in IDBI Bank through a preferential placement of shares. It holds 70.52% shares (December 2012). The board of bank also cleared its proposal to increase the equity capital from the institutional investors upto Rs 2,500 crore including premium amount in the last week.
B K Batra, a deputy managing director, said, “We are on the edge and we want to have cushion to manage our business growth. We plan to approach the LIC and the other institutions in the current quarter subject to the regulatory norms”.
The capital Adequacy Ratio was at 14.19% (Tier I was 8.01%) up at the end of December 2012 up from 13.53% (Tier I - 7.54%) a year ago. Its stock ended lower by one% to Rs 112.2 on the Bombay Stock Exchange.
Last year, LIC had rose up 5% share in Mumbai-based public sector lender through a preferential allotment a part of the capital expansion plans. LIC gained 9.16% stake. Meanwhile, in the third quarter bank restructured loans worth Rs 2,700 crore, mostly of big and mid size corporate accounts.The provisions for restructured loans climbed to Rs 160 crore in Q3 from Rs 134 crore a year ago.