AU Small Finance Bank raises Rs 2,000 crore via QIP

MUMBAI: AU Small Finance Bank likely raised about 2,000 crore through a qualified institutional placement from a host of global and local investors, which put up bids over four times higher than the actual size, according to market sources.

Bidders included Singapore's GIC, US-based Capital International and private equity giant Blackstone, they said, adding that local mutual funds too jumped into the fray, as Nippon, ICICI Prudential and DSP bid for the share sale. SBI Life Insurance was one of the bidders, they said.

Jaipur-based AU Small Finance Bank did not comment on the matter. Individual investors could not be contacted immediately for comments.

Although the book building is over, the deal was not formally closed at the time of writing this report.

The bank launched the share sale on Wednesday as it sought to dilute about 5% ownership. The bank’s market capitalisation is now at about 40,142 crore.

The price band was 570-590 apiece. It was finally fixed at 580, said market sources.

On Thursday, AU Small Finance Bank’s shares surged more than 4.5% on the BSE to close at 637.

According to the sources, Bofa Securities, ICICI Securities and Morgan Stanley were among the financial institutions that helped the bank raise the money. This comes at a time when foreign portfolio investors are resuming buying local securities after a nearly 10-month-long hiatus.

Earlier, AU Small Finance Bank's promoter Sanjay Agarwal had announced his intention to sell 7.5 million equity shares in the bank along with other promoters. Agarwal, who is also the managing director and CEO of the bank, will reduce his stake in the bank along with other promoters.

“This may happen only after the QIP is concluded fully. So it may take a week or two to begin the process,” said an executive involved in the matter.

For the June quarter, the small finance bank reported a 32% rise in net profit to 268 crore, aided by interest income and falling provisions. Its assets under management expanded by 37% year-on-year to 50,161 crore, with deposits growing 48% to 54,631 crore.