Indian banks shelve fundraising as coronavirus derails markets

A virus-driven lull in deal activity in India comes at a time when the local economy has been on a weak footing, with growth at the slowest pace in more than six years in the last three months of 2019.

Reuters

March 18, 2020 / 17:48 IST

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Two state-owned Indian banks that were aiming to raise funds to meet growth targets and build up capital for regulatory requirements have shelved their plans due to the disruption to markets caused by the coronavirus pandemic, sources said.

Bank of India was planning to raise around Rs 2,000 crore ($269 million) via a qualified institutional placement (QIP), a common capital-raising tool in India, by the end of March.

"These are not normal times and it makes sense to launch it when the right time comes," said a senior banking source with direct knowledge of the matter.

Central Bank of India was aiming to raise Rs 500 crore ($67 million) this quarter by issuing so-called Basel-III compliant bonds.

"A board meeting will be held next week and we will announce the decision then but it makes no sense to enter such a disruptive market," said a senior bank executive.

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