In a regulatory filing, South Indian Bank (SIB) said on Friday that it has got its board’s approval to raise Rs 240 crore by issuing equity shares on a preferential basis from HDFC Life Insurance Company, Kotak Mahindra Life Insurance Company, SBI Life Insurance Company and ICICI Lombard General Insurance Company.
The lender said that up to 28,30,18,867 equity shares of face value of Rs 1 each at an issue price of Rs 8.48 each will be issued to the insurance firms, subject to the approval of the shareholders and regulator.
Post-allotment of the securities HDFC Life, Kotak Mahindra Life and SBI Life will hold 4.23 % shares of the bank each while ICICI Lombard General Insurance will hold 0.85 % shares.
The board has also approved the convening of an extraordinary general meeting of the shareholders of the company to be held on Tuesday (March 23,2021) for seeking their approval for the proposed preferential allotment.
SIB had obtained approval of shareholders in the last AGM for raising funds in Indian or foreign currency by way of issuance of debt securities up to Rs 5OO crore. The lender has also obtained approval of shareholders for increasing the authorised capital of the bank to Rs 350 crore.
The bank had reported a net loss of Rs 91.62 crore in the third quarter of the fiscal on the account of higher credit cost.
The lender had said earlier that it will focus on 6Cs , which includes, raising capital , CASA (current and savings account), cost-to-income, competency building, customer focus, and compliance in the medium term, to achieve profitability through quality-credit growth.
Under the new plan ‘Vision 2024’, the bank aims to reach a loan book of Rs 1 trillion, CASA mix of 35%, PCR (provision coverage ratio) of over 65% and net interest margin (NIM) of 3.5% by 2024. The plan includes vertical structure for assets business and data analytics team to play a critical role in business and collections.