Mumbai Lender Ujjivan Small Finance Bank Ltd on Monday said its board has approved the launch of its so-called Qualified Institutional Placement (QIP) offering to raise funds from institutional investors.
QIP is a capital raising instrument through which listed companies can sell shares, fully and partially convertible debentures, or securities other than warrants that are convertible into stocks, to institutional investors.
In a stock exchange filing, the bank said that it has . floor price of 21.93 Shares for sale. On Monday, shares of Ujjivan SFB closed 5.42% higher at 25.3 per share on the BSE.
The bank plans to increase 475 million or $60 million via share sale, terms of the deal as seen by Mint show.
The bank will use the proceeds to augment its Tier I capital base to meet future capital requirements. The QIP will help the bank achieve the minimum public shareholding requirement of 25% under the Securities Contracts (Regulation) Rules.
The share sale will result in dilution of 13.1% of the pre-issue outstanding equity share capital.
As per the terms of the deal, the bank is considering an indicative issue price of Rs 21 per share, a discount of 4.2% on the SEBI minimum price, a discount of about 17% on the final closing price.
Investment banks IIFL Securities Limited and DAM Capital Advisors Limited are managing the share sale.
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