The share price of Axis Bank jumped over 3.5 percent on Wednesday after the lender launched a qualified institutional placement (QIP) to raise Rs 10,000 crore.

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The stock surged as much as 3.7 percent to Rs 445 per share in intraday deals, becoming one of the top gainers on both the benchmarks.

In a stock exchange filing, the lender said that its board had approved the launch of the share sale and had fixed a floor price of Rs 442.19 per share for the QIP offering. The floor price was at a 3 percent premium to Tuesday's closing price of Rs 428.90 on the BSE.

"The committee of whole-time directors of the bank at its meeting held today i.e. 4th August 2020, has decided to open the issue for receiving bids. The committee also approved and adopted the preliminary placement document in connection with the issue," Axis Bank said in the filing.

Sources told CNBC-TV18 that the QIP book has been closed with demand at 3x. They added that 80 percent of the demand for the QIP came from global only funds.

The board of the bank had last month approved the Rs 15,000 crore fundraise plan. The QIP was okayed by shareholders at the annual general meeting held on July 31, 2020, the bank said.

"We believe this fundraising in this environment would be positive for Axis bank. At base price Tier I to increase approx. 150bps, net worth to gain 11.6 percent, and Book value to increase by 2.9 percent. In uncertain times adequate capital adequacy (CAR) will provide comfort to investors. Currently, Axis bank trades lower valuation compared to the historical average. Lower valuation and increase in CAR would be positive for Axis Bank," said Jaikishan Parmar, Senior Equity Research Analyst at Angel Broking.

The bank, however, added that its committee of whole-time directors at its absolute discretion may offer a discount of not more than 5 percent to the said floor price.

It also informed that the committee would meet on August 10, to consider and approve, among other things, the issue price for the equity shares proposed to be issued.

First Published:Aug 5, 2020 11:53 AM IST