Punjab & Sind Bank Share Price Jump 13% After QIP Floor Price Announcement

Shares of Punjab & Sind Bank soared over 13% on Tuesday after the lender set a floor price of ₹40.38 per share to raise funds through a Qualified Institutional Placement (QIP).

Stock Performance

Punjab & Sind Bank share price climbed 13.08% to ₹50.5 per share, marking its biggest intraday gain since January 14. However, it later trimmed gains and traded 7.8% higher at ₹48.18 as of 10:40 AM, outperforming the Nifty 50, which was up 0.31%.

This marks the sixth consecutive session of gains for the stock. Despite this rally, Punjab & Sind Bank’s shares are down 1.29% year-to-date, compared to a 0.7% increase in the Nifty 50. However, the stock has surged over 25% since hitting a low of ₹36.9 in early March. The lender’s total market capitalization currently stands at ₹32,269.04 crore.

QIP Details

On Monday, Punjab & Sind Bank’s board approved the preliminary placement document and the application form for the QIP issue. In February, the board had given the green light to raise ₹2,000 crore through security issuance.

The bank set the floor price at ₹40.38 per share based on SEBI’s pricing formula. It may also offer up to a 5% discount on this price.

Impact of QIP on Government Stake and Capital Adequacy

With this fundraising, the government’s stake in Punjab & Sind Bank is expected to decrease by 3-4%. The capital adequacy ratio is projected to improve by the end of March 2025. As of December 2024, the Indian government held a 98.25% stake in the bank.

Punjab & Sind Bank had previously approved a total capital-raising plan of ₹10,000 crore for the current fiscal year. This includes ₹5,000 crore in infrastructure bonds, ₹2,000 crore through QIP, and ₹3,000 crore via Tier-1 or Tier-2 bonds.

Financial Performance

In the third quarter ended December 2024, Punjab & Sind Bank’s net profit more than doubled to ₹282 crore, compared to ₹114 crore in the same period last year. The increase was driven by a decline in bad loans.

Total income for the quarter rose to ₹3,269 crore from ₹2,853 crore in the previous year, reflecting the bank’s improved financial performance.

Conclusion

Punjab & Sind Bank’s strong rally reflects investor confidence in its capital-raising efforts. With improving financials and reduced bad loans, the bank aims for stronger growth ahead.

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