PE-backed South Indian Bank may raise up to $3.3M via QIP

Private lender South Indian Bank has said that its board has approved a proposal to raise up to Rs 20 crore ($3.3 million) through qualified institutional placement (QIP), as per a stock market disclosure.

The bank did not disclose further details and said the price and time of the issue will be intimated in due course.

South Indian Bank is backed a slew of private equity investors like Multiples, Carlyle Group and CX Partners.

Early this month Multiples Alternate Asset Management or Multiple had logged its first exit by selling a fifth of its holding in South Indian Bank less than two years after backing the private bank. The PE firm sold its shares to a hedge fund run by Indian origin investment manager Mohnish Pabrai.

Multiples sold around 1 per cent stake for Rs 47.3 crore (just under $8 million) on Friday, in its first liquidity move from its debut fund which raised around $450 million in 2010-11.

The PE firm had picked 5.6 per cent stake in old generation private bank through a QIP in 2012, where South Indian Bank raised Rs 443 crore in total. The QIP had also seen participation from The Carlyle Group, which started picking up stake in the Thrissur-based bank a few months before the same year.

Earlier this year, Dubai-based NRI businessman Yusuffali MA, the founder of the $5.1 billion Lulu Group which runs one of the biggest retail chains in Asia, picked up 2.23 per cent stake in the Thrissur-based bank.

South India Bank's scrip closed at Rs 32.75 a share, up 0.15 per cent on BSE in a flat Mumbai market on Thursday.

The bank reported a 10 per cent increase in net profit to Rs 126.65 crore for the quarter ended June 30, 2014 compared with Rs 115 crore in the same quarter last year.

Recently another PE-backed private sector lender City Union Bank raised Rs 350 crore ($58 million) via QIP. City Union Bank is backed by ChrysCapital and MCap.

(Edited by Joby Puthuparampil Johnson)

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