Punjab National Bank (PNB), one of India’s largest public sector banks, has announced a significant fundraising plan for the financial year 2024-25. The bank’s board of directors has approved a proposal to raise equity capital amounting to Rs 7,500 crore. This capital increase will be conducted in one or more tranches using different methods such as Qualified Institutional Placement (QIP), Follow-on Public Offering (FPO), or a combination of other permitted modes.
The decision comes as part of the bank’s ongoing efforts to strengthen its capital base. In the previous fiscal year 2023-24, PNB had received board approval for raising capital of Rs 12,000 crore. Up until the end of September of the current fiscal year, the bank successfully raised Rs 6,090 crore, comprising Rs 3,000 crore in AT1 bonds and Rs 3,090 crore in Tier-II capital. Additionally, in the fiscal year 2022-23, PNB raised Rs 8,214 crore through AT1 and tier II bonds, against a board-approved capital raise of Rs 12,000 crore.
This fundraising effort is part of a broader strategy by PNB to maintain a robust capital adequacy ratio, which stood at over 15% as stated by Atul Kumar Goel, the bank’s managing director and CEO. The newly raised capital will further reinforce the bank’s financial stability and support its growth and expansion strategies.
These developments are particularly notable as they indicate the bank’s proactive approach to capital management and its commitment to maintaining a strong financial position. This move is expected to bolster investor confidence and support the bank’s long-term growth trajectory.