DBI Bank, the state-backed Indian lender, appointed advisers including Bank of America, Citigroup and Credit Suisse Group to arrange a share sale of as much as Rs37.7bn ($564mn), people with knowledge of the matter said.
The lender also hired Deutsche Bank, HSBC Holdings, IDBI Capital Market Services and SBI Capital Markets for the institutional placement, according to the people. It has started reaching out to potential investors including the World Bank’s International Finance Corp, two of the people said, asking not to be identified as the details are private.
The fundraising will help IDBI Bank to bolster its balance sheet as it seeks to rein in bad debts that totalled 6.9% of its loans at the end of September. The Mumbai-based lender had a capital adequacy ratio of 11.7% at that date, compared with 12.7% for the country’s entire banking system, data compiled by the Reserve Bank of India show.
IDBI Bank won government approval in December to sell as much as Rs37.71bn of stock to institutional investors. The bank could start the offering as early as this quarter, two of the people said.
IDBI Bank chief financial officer NS Venkatesh didn’t immediately respond to phone calls seeking comment, while a New Delhi-based spokeswoman for IFC didn’t immediately respond to an e-mail seeking comment.
India’s deputy finance minister, Jayant Sinha, said in November the government is “going to transform” IDBI Bank in a similar fashion to its previous overhaul of Axis Bank. The government owns 76.5% of IDBI Bank, according to data compiled by Bloomberg.
IDBI Bank won government approval in December to sell as much as Rs37.71bn of stock to institutional investors. The bank could start the offering as early as this quarter, sources said yesterday.
