ING Vysya Bank to raise $365M through QIP, preferential allotment

Private sector lender ING Vysya Bank Ltd is planning to raise up to Rs 2,000 crore ($365 million) by way of preferential allotment to the promoters and institutional buyers. However, the bank did not specify any timeframe for its fundraising plans.

“The board of directors of the bank, at its meeting held on May 17, 2013, has approved a fundraising proposal through further issue of capital of up to 30,000,000 equity shares,’’ the bank said in its filing to the BSE.

The lender can raise a maximum of Rs 2,000 crore, by way of preferential issue to the promoters of the bank and qualified institutional placement to qualified institutional buyers, subject to the approval, it added.

Dutch financial major ING Group holds 43.93 per cent stake in the bank while other investors include Kotak India Growth Fund II and India Advantage Fund Series III.

Other players in the banking space that are looking to raise funds include Karnataka Bank, United Bank and Yes Bank. As for the quantum of preferential allotments, the biggest issuance in recent times was done by Axis Bank which raised Rs 5,537 crore in early 2013.

Investor interest in the Indian financial sector is picking up even as several companies are preparing to meet the July 1 deadline to apply for banking licence.

In March this year, Ravi Pillai, a Bahrain-based NRI businessman, bought 4.49 per cent stake in Dhanlaxmi Bank, a Trissur-based old-generation private lender.

In the following month, private sector lender Kotak Mahindra Bank raised Rs 1,296 crore ($239 million) from GIC Singapore, one of the world’s largest sovereign wealth funds. The bank sold 2.6 per cent stake to Heliconia Pte Ltd, an affiliate of GIC, on a preferential basis.

ING Vysya Bank reported a net profit of Rs 170 crore for the quarter ended March 31, 2013, compared to Rs 127 crore in Q4 FY12. Its total income increased 15 per cent to Rs 1,454 crore in the last quarter of FY13.

Bangalore-based ING Vysya Bank is headed by MD & CEO Shailendra Bhandari, who joined in 2009 after quitting as head of Tata Capital’s private equity business. Prior to that, he was heading PE-controlled Centurion Bank of Punjab, which was acquired by HDFC Bank in 2007.

ING Vysya Bank was formed when the erstwhile Vysya Bank Ltd and ING merged in October 2002.

In 2011, the bank raised Rs 970 crore through a qualified institutional placement and a preferential allotment to the promoters. The issue saw the bank raise Rs 513 crore from qualified institutional buyers (which also included a domestic PE firm) by selling 10 per cent stake. The rest of the amount (Rs 457 crore) was raised through a preferential allotment to its Amsterdam-headquartered parent ING Group, which has maintained its stake after the issue.

(Edited by Sanghamitra Mandal)

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