MUMBAI: IDBI Bank plans to raise around Rs 6,500 crore in capital in the current financial year, Rakesh Sharma, MD & CEO of the bank said. The bank, which is majority owned by LIC, may also look at Rs 3,000 cr from sale of bonds to shore up its capital. LIC had brought in Rs21,624 cr through the preferential share issue during the last financial year, taking up its stake in the bank to 51 per cent. Apart from the equity and bond issuances, the bank is also looking at asset sales to raise Rs 1,500 cr.
IDBI Bank’s CET (Common Equity Tier) – I ratio had fallen to a low of 3.87 per cent at the end of September quarter, bogged down by one of the highest NPAs in the industry. After LIC’s capital infusion, the CET-I ratio has improved to 8.91 per cent by the end of March quarter. On Wednesday, the bank issued expression of interest for sale of stake in its mutual fund business which it has to mandatorily sell as per the SEBI regulations before January 2020.
It also revived plans to sell stake in the insurance subsidiary, either in full or partial depending on the market response, Sharma said. IDBI Bank continued to be in red, though its fourth quarter net loss fell to Rs 4,918 cr compared with Rs5,662 cr in the corresponding quarter of previous year. However, for the full financial year, its net loss ballooned to Rs 15,116 cr from Rs8,234 crore in the previous year as it increased provision for NPAs. Gross NPAs were almost flat at 27.47 at the end of March, while net NPAs were down to 10.11 from 16.69 in the previous year.
IDBI bank had a recovery of Rs11,200 cr from bad loans in FY 19, and has 338 accounts in NCLT with outstanding loans of around Rs30,000 cr. The management is committed to bring down the Net NPA to below 9 per cent by the June quarter, and below 6 per cent by December quarter, Sharma said.