ICICI, HDFC, Axis Bank raise nearly ₹35,000 crores via QIP
Leaders of private sector ICICI Bank, Axis Bank, and Housing Development Finance Corp Ltd (HDFC) raised nearly ₹35,000 crores in the last week using the qualified institutional placement (QIP) route from institutional investors, indicating that investors continue to be bullish on financial services majors.
On Monday, ICICI Bank launched its QIP to raise $2 billion ( ₹15,000 crores). “The deal received strong interest from both domestic and foreign investors. The $2 billion deal saw a demand of almost $5 billion," a person advising the bank on the fundraise said on the condition of anonymity.
On Tuesday, Axis Bank said it has raised ₹10,000 crores via QIP. The issuance price of ₹420.1 per equity share was at a 5% discount to the floor price of ₹442.19, which was determined based on the pricing formula.
Ravi Dubey partner in IndusLaw said “The recent spate of successful fundraising by established banking, financial services, and insurance players underlines the willingness of investors to take a long-term view of the sector. We expect the momentum to continue for issuers with strong businesses," said.
For sectors most affected by the pandemic, such as aviation and hospitality, fundraising remains a challenge.
Amitabh Chaudhry, managing director and chief executive officer in Axis Bank said “We believe the bank is well-placed to leverage all growth opportunities that will come in as the economy opens up and is in a strong position to combat challenges,"
The Reserve Bank of India’s Financial Stability Report had warned of a spike in bad loans and a decline in the capital adequacy ratio of banks due to COVID.