Dena Bank to raise up to Rs 400 crore via QIP
Dena's net NPAs have deteriorated sharply from 3.80% in March 2015 from 11.20% in June 2017.
In a notice to the stock exchanges, the bank said it will sell shares to institutional investors at a floor price of Rs 30.73 per share or at a 5 per cent discount to that price. The issue, opened late on Tuesday evening, is likely to be subscribed by early morning on Wednesday.
Dena follows its public sector counterpart Vijaya Bank which raised Rs 700 crore through a similar QIP at the end of August. SBI the largest bank in India had earlier raised Rs 15,000 crore in the biggest such sale in June.
However, Dena's case is different be cause it is among six banks which have been put under prompt corrective action by the RBI restricting these lenders from announcing dividend, opening branches, hiring and giving loans to companies rated below investment grade.
"Granted Dena is under PCR but investors putting money in a QIP are betting on the management's ability to turn around the bank. We would not have launched the issue if there were no takers. We are sure that this issue will be subscribed fully," said a person closely involved in the sale.
Dena's net NPAs have deteriorated sharply from 3.80 per cent in March 2015 from 11.20 per cent in June 2017. It reported a loss of Rs 132.65 crore in the first quarter ended June 30.
Expectations are the government owned institutions like LIC will back the QIP. IDBI Capital and Motilal Oswal are the bankers to the issue.