Public sector bank Punjab & Sind Bank announced the approval and launch of its qualified institutional placement on Monday, as per an exchange filing. The floor price of the QIP has been fixed at Rs 40.38 apiece, marking a 9.5% decrease from the stock's closing price of Rs 44.66.
This development comes after the company's board initially proposed the fundraise nearly 10 months ago to raise capital up to Rs 2,000 crore through the issuance of securities.
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The financial services company may offer a discount of not more than 5% on the floor price calculated for the QIP, according to the filing.
Recently, Motilal Oswal's co-founder Raamdeo Agrawal had expressed his bullishness on the banking sector, saying it is set to be the star performer in the current market cycle.
The banking sector, which was on a decline, saw a sharp recovery in the last few sessions, with the Nifty Bank hitting a three-month high and Nifty Financial Services near a six-month-high on Monday.
Agrawal noted that banks are now being encouraged to lend more credit, and with liquidity at healthy levels and interest rate cuts on the horizon, the stage is set for credit growth to pick up.
Furthermore, the balance sheets of most major banks are cleaner than ever, with credit costs at historic lows. This is particularly true for public sector banks, which have made significant progress in cleaning up their books, Agrawal pointed out.
Shares of Punjab & Sind closed 2.83% higher at Rs 44.66 apiece on the National Stock Exchange, underperforming the benchmark Nifty, which closed 1.32% higher. The share price has fallen 22.47% in the last 12 months and dipped 8.22% on a year-to-date basis.
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