Second COVID-19 wave may delay PSBs equity raising plans

Public sector banks in want of raising equity have begun preparations for share gross sales however the second wave of the coronavirus may delay their plans. (PNB), and will probably be seeking to collectively elevate something between Rs 6000 and Rs 8000 crore, however a lot would rely upon the market situations.

Public sector banks would wish about Rs 43,000 crore of recent equity capital this fiscal, ICRA Ratings estimated. The authorities would infuse Rs 20,000 crore and the stability must be mobilized from the market.

“Our QIP will be in the first quarter provided the market conditions are favourable,” Indian Bank chief government Padmaja Chundur mentioned. Bank of Maharashtra chief government AS Rajeev mentioned that his financial institution would goal the second quarter for equity raising to the tune of Rs 1000 crore by way of a mixture of QIP and/or observe on public provide.

PNB, which fell in need of the focused QIP of Rs 7000 crore by 46% in December final yr, plans to faucet buyers once more for the stability Rs 3200 crore. Indian Bank has board approval for Rs 4000 crore. Bank of Maharashtra has board approval for Rs 2000 crore. Reserve Bank of India Governor Shaktikanta Das urged banks to create capital buffer over and above the regulatory norms

Banks would wish to shore up their capital place to soak up among the slippages in addition to to maintain credit score movement, particularly when financial and monetary measures unwind, Das mentioned in March on the Times Network India Economic Conclave 2021.

“It’s unlikely that public sector banks tap the equity market in the first half, given the past precedents. There could be bunching up of QIP in the second half after credit growth starts picking up. By that time, these banks would be able to assess how much capital they require,” ICRA’s sector head for monetary sector scores Anil Gupta mentioned.

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