Private sector lender AU Small Finance Bank (SFB) started its qualified institutional placement (QIP) on August 3 to raise Rs 2,000 crore and set a floor price of Rs 590.84 per share.

The company wants to use Rs 1,600 crore as the base deal size, with an option to add a further Rs 400 crore in total financing.

Jaipur-based AU, Small Finance Bank, said: “The Ways and Means Committee of the Board of Directors has passed the following resolutions at its meeting today: (a) authorising the issuance to commence on 3 August 2022. (b) noting the issue of the floor price, and (c) Approval and Approval of the Preliminary Placement Document dated 3 August 2022.”

“Banks may offer discounts of up to 5% on the floor price calculated for the issue,” the lender said.

“The bank’s fundraising committee plans to meet on August 8, 2022, to, among other things, consider and determine the issue price of the shares,” the bank added.

In July, the bank’s board approved a Rs 3,000 crore equity financing proposal. In addition, the Board has also approved the issuance of debt instruments (including but not limited to debentures and non-convertible debentures) to borrow or raise funds in one or more sums not exceeding Rs 6,000 crore.

AU Small Finance Bank reported that its first-quarter net profit rose 32% year-on-year to Rs 268 crore. It reported a net profit of Rs 203 crore in the same period last year.

The bank remains well-capitalised with a total CRAR (capital to risk-weighted assets ratio) of 19.4% against a minimum requirement of 15%. Add in the interim profit, and the CRAR will be 20%. Its Tier 1 capital ratio is 18.4%, with a minimum requirement of 7.5%. Including the interim profit, the Tier 1 capital adequacy ratio is 19.1%.