Punjab National Bank Slumps 8% As QIP Issue Progresses

On Wednesday, shares of Punjab National Bank (PNB) fell as much as 8% to Rs 37.25, extending its 10% decline in the last two trading days. The state-owned bank announced the opening of its qualified institutional placement (QIP) issue on Tuesday, however, its share price has fallen below the QIP floor price of Rs 37.35 per share.

On Tuesday, the public sector lender said in a stock exchange filing that the Capital Raising Committee of the Bank has, at its meeting held on 15 December 2020, authorized the opening of the issue on 15 December 2020 and approved the floor price of Rs 37.35 per equity share for the QIP.

"In terms of Regulation 29(1) of the SEBI ICDR Regulations, we wish to inform you that a meeting of the Capital Raising Committee of the Bank is scheduled to be held on Friday, December 18, 2020 to, inter alia, consider and determine the issue price for the Equity Shares, including a discount, if any, to be allotted to Qualified Institutional Buyers, pursuant to the QIP," it added.

PNB has taken approval for raising Rs 7,000 crore through QIP route this fiscal year.

The bank may at its discretion offer a discount of not more than 5% on the floor price, it said.

In the preliminary placement document, the bank said that it intends to utilize the net proceeds towards augmenting Bank's Tier I Capital to meet the Basel III and to support growth plans and to enhance the business of Bank.