Axis Bank on Friday said it proposes to raise equity and equity-linked capital amounting to ₹11,626 crore from a set of marquee investors, including entities affiliated with Bain Capital Private Equity and the bank’s promoter Life Insurance Corporation of India (LIC).

India’s third-largest private sector bank, in a statement, said it proposes to issue equity for ₹9,063 crore and warrants for ₹2,563-crore.

Entities affiliated with Bain Capital, and public sector life insurer LIC propose to invest ₹6,854 crore and ₹1,583 crore, respectively, in the instruments, respectively.

The bank proposes to issue 172,630,639 equity shares on a preferential basis at ₹525 per share (at a premium of 2.4 per cent to the SEBI floor price as of the relevant date), and 45,357,385 warrants convertible into equity shares at ₹565 per share (at a premium of 10.2 per cent), adding ₹43.6 crore to the paid-up capital of the bank.

This would mean a dilution of 8.23 per cent for the existing shareholders.

Growth capital

Axis Bank said the funds will bolster the capital adequacy, thereby providing the impetus for the growth of the core business of the bank and its subsidiaries.

The capital-raise is subject to shareholders’ approval at the bank’s EGM on December 8. Once approved, this would be one of the largest private equity investments in the Indian banking sector, the statement said.

Sanjiv Misra, Chairman, Axis Bank, said: “Banking in India is at an inflection point right now. The credit growth trajectory in the country is turning. Axis is well positioned to participate in this development. This significant capitalisation of Axis Bank, and the interest shown by marquee investors, positions us for even greater strength.”

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