PSU banks plan Rs 8,500-9,000 crore of QIPs | Economic Times

New Delhi: Public sector banks are expected to launch qualified institutional placement (QIP) offerings worth ₹8,500-9,000 crore in the next quarter amid a rebound in equity markets, according to sources in the know.The public sector banks that are lining up such offerings include Indian Bank, Bank of Maharashtra and Canara Bank, these sources said. All three are expected to launch their offerings between July and September.Indian Bank is planning to raise ₹4,000 crore through a QIP and is expected to time its offering around the first week of July. It is said to have appointed six merchant banks for the planned offering. ICICI Securities will be among the lead arrangers. It had passed a board resolution on March 9, enabling it to raise funds.Similarly, Bank of Maharashtra is also expected to launch its QIP offering in July. It plans to raise ₹2,000 crore. The bank had passed a board resolution on April 29, allowing it to raise up to ₹5,000 crore by way of share sales. It is in the process of finalizing merchant bankers to advise it on the sale. 83127333Canara Bank is also planning a QIP offering of around ₹2,500 crore. It sought board approvals over the weekend.Indian Bank, Bank of Maharashtra and Canara Bank did not respond to ET’s queries.Apart from the resurgence in equity markets, the exuberance around fund-raising by these public sector banks follows the recent successful QIP offering of Union Bank of India that raised ₹1,500 crore in May. “There is demand for paper in the market, especially at good valuations. The public sector banks are being seen as cheaper bets compared to private sector banks,” said Devang Mehta, head equity advisory, Centrum Wealth.Mehta also noted that commentary from large public sector banks such as the State Bank of India has been positive, giving confidence to investors.During the last fiscal, state-owned banks raised ₹11,000 crore in equity offerings. Indian Bank recently reported its earnings for FY21. It reported a net profit of ₹1,709 crore in the fourth quarter. Allahabad Bank got amalgamated into Indian Bank effective April 1, 2020, after a government-mandated reorganisation.Bank of Maharashtra reported a net profit of ₹165 crore for the last quarter of the preceding financial year. Canara Bank also posted a net profit of ₹1,010 crore in the fourth quarter of FY21.Several public sector banks including Punjab National Bank, IDBI Bank and Bank of Baroda had successfully raised funds through this route in the previous financial year. Bank of Baroda's QIP, which was the largest, garnered ₹4,500 crore from investors.