State-run IDBI Bank on Saturday said it will raise up to Rs. 1,200 crore through institutional placement of shares.
The bank needs an additional Rs. 3,000 this fiscal, of which Rs. 1,800 crore will come from the government and the rest will have to be raised via qualified institutional placement (QIP) route, IDBI Bank Chairman and Managing Director M.S. Raghavan told reporters here.
Speaking on sidelines of the annual banking conference (Bancon), he said, 'Rs. 3,000 crore is the amount we foresee, of which Rs. 1,800 crore has been allotted by the government. So, Rs. 1,200 crore is the rough estimate which will come through QIP.'
The lender had been allotted Rs. 1,800 crore in support from the largest shareholder, the government, as part of the Centre’s Rs. 14,000-crore capital infusion programme for banks during this fiscal.
Asked if IDBI Bank would also look at tier-II capital raising, Mr. Raghavan said it was very comfortable in that front and will not be doing any debt raising for the next two years.
Mr. Raghavan, who took over as CMD recently, said his main objective is to achieve the priority sector lending (PSL) target so that funds yield better margins for the lender.
IDBI started out as a dedicated financial institution for corporate finance and turned into a full-fledged lender around a decade back.