Mumbai: State-owned Vijaya Bank has started the process of hiring merchant bankers to manage an institutional share sale worth up to Rs1,000 crore.
The Bengaluru-based lender has floated a request for proposal for selecting bankers for the qualified institutional placement (QIP), according to a tender notice on its website.
The bank has planned the fund raise in a bid to strengthen its capital base and fund its business requirements.
Vijaya Bank’s current capital position is strong. At the end of March, capital adequacy ratio under the Basel III norms stood at 12.73%, well above the minimum 10.25% stipulated by the Reserve Bank of India.
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The bank did not request government to infuse capital and has planned this fund raise in order to improve its capital base to above 13% by March 2018, according to a PTI report date on 12 May.
According to the bank’s 2016-17 annual report, Vijaya Bank is focussing on cancellation of undrawn exposures of large values. This will help to reduce capital allocation and free up funds for investing in profitable ventures.
Last week, State Bank of India raised Rs15,000 crore in the largest QIP in the country.