MUMBAI: Axis Bank has raised $720 million (nearly Rs 3,490 crore) by issuing equity through a mix of qualified institutional placement (QIP) and global depository receipts (GDR) issue.

The issue, which closed late on Thursday, has been priced at Rs 906.70 per share. The bank will raise another $80 million from its promoters, thus raising the total issue size to $800 million (around Rs 3,880 crore). Among the promoters, only Life Insurance Corporation of India (LIC) will subscribe to the preferential issue. The bank has raised around $95 million through GDRs and another $625 million (around Rs 3,007 crore) from QIP. This is the largest QIP issue since 2008. The last big QIP was by GMR

Infrastructure, which raised $1 billion in late 2007. Until Axis Bank entered the market, the largest QIP this year was by Unitech, which managed to mop up Rs 2,789.33 crore in June.

The bank is said to have received an order book of around 1.5 times. Lead managers for the issue are Deutsche Bank, Goldman Sachs and JP Morgan. The scrip close Rs 914.1 on BSE on Friday, marginally higher than the previous day’s close.

Axis Bank will also raise money from LIC at the same price. However, GIC and other general insurers will not be participating in the issue, as these companies had traded in equity shares in the past six months, and hence, are not eligible to participate. The move would help LIC, which has a 10.3% stake in the bank, maintain its stakeholding.

Special Undertaking of UTI (SUUTI), the largest shareholder of the bank at 27.02%, had already said it would not participate in the issue — a decision that would bring down its stake to 25%. General insurance companies currently have a 4.8% stake that will also come down.

Officials in the know said a host of private insurance companies and mutual funds participated in the issue. Also, some of the larger shareholders of the bank, other than the promoters, are also said to have put in their applications so as to maintain the stake. They include HSBC, Orient Global and ICICI Prudential Life Insurance, which currently have a stake of 4.92%, 4.05% and 4.47%, respectively. Some of the new large investors which came in include HDFC Mutual Fund, Lloyd George, Fidelity and Legg Mason. Initially, the bank was looking to issue 20% of the present paid-up capital, or 7.14 crore fresh equity shares, in the follow-on issue. Post-preferential issue, the stake dilution will be in the range of 11%.

The bank was looking to hike its tier-I capital adequacy ratio that was 9.39% as on June 30. Composite capital adequacy, which includes tier-I capital and subordinated debt, was at 15.28%. Internationally, banks are looking to shore up.

their tier-I capital, post-financial crisis. Even in case of ICICI Bank, the tier-I capital is as high as 13.1%. Axis Bank had raised $1.05 billion (around Rs 4,217 crore) through an equity issue in 2007. It had raised the money through a mix of QIP, preferential issue to its promoters and GDR. It raised $218.07 million through GDRs another $436 million (Rs 1,752 crore) through QIP and around $396 million (Rs 1,588 crore) through a preferential issue.

The bank had priced its issuance at Rs 620.