MUMBAI: Axis Bank on Friday said it would raise Rs 11,626 crore equity and equity-linked capital from a clutch of marquee investors including Bain Capital and Axis’ promoter LIC. The proposed capital is expected to bump up the bank’s capital adequacy ratio, and provide growth capital for both Axis and its subsidiaries’ core business. This is also one of the largest private equity investments in the Indian banking sector in recent times. However, the capital raised is subject to shareholders’ approval at Bank’s EGM to be held on December 8.
Of the total, Rs 9,063 crore will be raised through issuance of equity and Rs 2,563 crore through issue of warrants. While entities affiliated with Bain Capital will plonk down Rs 6,854 crore, LIC proposes to invest Rs 1,583 crore. The bank received the board’s approval on Friday, Axis said in a statement. “This significant capitalization of Axis Bank, and the interest shown by marquee investors, positions us for even greater strength,” said Dr Sanjiv Misra, chairman, Axis Bank.
Axis proposes to issue over 17 lakh equity shares on preferential basis at Rs 525 per share and 4.5 lakh warrants convertible into equity shares at Rs 565 per share, adding Rs 43.6 crore in the paid up capital of the Bank. In other words, it amounts to a stake dilution of 8.23 per cent for existing shareholders.
Axis Bank was advised exclusively by Axis Capital Ltd and Bain Capital was advised exclusively by JP Morgan on this transaction. Legal advisors to Axis Bank were Shardul Amarchand Mangaldas and Bain Capital was advised by AZB & Partners.
Stephen Pagliuca, co-chairman of Bain Capital said, “In India’s banking industry we believe reach, scale and analytics driven underwriting will become increasingly important. Axis Bank’s leadership team, led by Shikha Sharma, is very well positioned to take advantage of the same, in what promises to be an exciting growth phase for private sector banks in the country.