PNB Raises Rs 5,000 Crore Via QIP; Citigroup, BofA Securities Among Buyers

Punjab National Bank has raised Rs 5,000 crore through a qualified institutional placement, according to an exchange filing on Friday.

The fundraise is lower as compared to the bank's initial aim to raise up to Rs 7,500 crore via the QIP route.

The country's second-largest state-run lender said its capital raising committee has allotted 48.2 lakh shares to the eligible qualified institutional buyers at a price of Rs 103.75 apiece. This marked a discount of 5% as against the issue's floor price of Rs 109.16 per share.

The QIP was launched on Sept. 23 and closed on Thursday. The bank, while opening the issue, was looking to raise Rs 2,500 crore through the base offer, and another Rs 5,000 crore via the greenshoe option.

The major buyers under the issue are Citigroup, BofA Securities, Morgan Stanley and Goldman Sachs.

As per the disclosure made by the lender, Citigroup Global Markets Mauritius Pvt. has been allotted 21.8% of the overall QIP issue, BofA Securities Europe SA ODI was allotted 8.3%, SBI Contra Fund 7.9%, Morgan Stanley Asia (Singapore) Pte. 5.9%, and Goldman Sachs (Singapore) Pte. 5.8%.

PNB had secured the nod from its board of directors in December 2023 to raise up to Rs 7,500 crore in the current financial year in one or more tranches through QIP, follow-on public offer, or any other mode or combination thereof.

The fundraising plan had received approval from the lender's shareholders at the extraordinary general meeting called on March 5.

Shares of PNB settled 1.8% higher at Rs 109.22 apiece on the NSE, compared to a 0.14% decline in the benchmark Nifty 50. On a year-to-date basis, the stock has risen by 14%, whereas the surge has been sharper at 34% in the past 12 months.

Six out of the 18 analysts tracking the company have a 'buy' rating on the stock, five suggest a 'hold' and seven have a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 7%.