As of now, the bank plans to launch the issue in September, post its results.
Chennai headquartered government-owned Indian Bank plans to kick-start a fundraising exercise via the qualified institutional placement (QIP) route in a few months, multiple sources with knowledge of the matter told Moneycontrol.
"Indian Bank is planning to raise around Rs 1,500 crores through the QIP route for growth capital and as of now, plans are to launch the issue in September, post its quarterly results," according to one of the sources cited above.
"Through the QIP, the government can also reduce its stake in Indian Bank to meet regulatory norms. Plus, the Indian Bank management also wants to revive the operations of its housing subsidiary Ind Bank Housing and scale up its book," added a second source.
Market regulator SEBI's norms mandate that every listed entity will maintain a minimum public shareholding of 25 percent, though recent reports indicated the Finance Ministry may seek a relaxation of this clause for PSU banks.
Currently, the government has 81.49 percent stake in Indian Bank. The government shareholding in many state-run banks is above 75 percent. The nation's largest lender State Bank of India has already initiated steps to raise Rs 20,000 crore via the QIP route which is likely to be launched soon based on market conditions and investor appetite.
" The much awaited SBI QIP should impart the PSU bank flavour in the markets, setting the stage for other PSU bank QIPs like Indian Bank," added a third source. In a resolution passed in December 2017, the Indian Bank board had approved raising up to Rs 7,000 crore by way of equity shares.
According to its website, Indian Bank has a pan India presence with 2,872 domestic branches and 3,892 ATMs/BNA's. Its total business touched Rs 429,972 crore as on March 31, 2019 with an operating profit of Rs 4,881 crore and net profit of Rs 322 crore for the year ended March 31, 2019. The bank has overseas branches in Singapore & Sri Lanka and Colombo and two subsidiaries, namely Indbank Merchant Banking Services & Ind Bank Housing.Moneycontrol is awaiting a response to email queries sent to Indian Bank and will update this article as soon as it hears from them.