Vendors sell fruit and vegetable from stalls near an Axis Bank Ltd. branch in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

India's Axis Bank Considers a $1.3 Billion Share Sale

(Bloomberg) -- Axis Bank Ltd. is considering raising at least $1.3 billion through a share sale to institutional investors, people with knowledge of the matter said, as the Indian lender seeks to bolster capital ratios and expand lending capacity.

India’s third-largest private sector lender, led by Chief Executive Officer Amitabh Chaudhry, is talking to potential advisers about the fundraising, according to the people. The bank plans to seek board approval for the sale as early as next month, the people said, asking not to be identified as the information is private.

The deal would help the Mumbai-based lender enhance risk buffers and support loan growth at a time when shadow banks in the country are battling a liquidity crunch due to rising wariness in the nation’s credit market. In March, the bank’s overall capital adequacy ratio was lower than its top Indian private-sector peers.

India's Axis Bank Considers a $1.3 Billion Share Sale

No final decisions have been made, and the potential deal could still be delayed or fall apart, the people said. A spokeswoman for Axis Bank didn’t immediately respond to a request for comment.

Shares of the lender erased earlier gains of as much as 2.3% to fall 0.9% to 781.6 rupees in Mumbai after the report. The bank is still the best-performing stock on the 10-member Bankex index in 2019 with gains of 28%, compared with a 10% advance in the benchmark BSE Sensex index.

©2019 Bloomberg L.P.

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