Axis Bank Ltd., India’s third-largest non-state lender by market value, gained the most in more than four months after it began an earlier-announced 55.5 billion-rupee ($1 billion) share sale.
The stock rose as much as 6.41 percent in Mumbai, the biggest increase since Sept. 21, according to data compiled by Bloomberg. It traded 4.7 percent higher at 1,479.95 rupees at 1:35 p.m.
The bank is offering 39.9 million shares at 1,390 rupees, according to a term sheet obtained by Bloomberg News yesterday, fewer than the 45.8 million shares it said it may sell to institutional investors last month. The sale is India’s largest this year and comes after companies raised 573 billion rupees selling equity in 2012, data compiled by Bloomberg show.
“Fresh issuance of capital will help the lender to boost lending and improve profitability,” said Hatim Broachwala, a Mumbai-based analyst at Karvy Stock Broking Ltd. “The issue has been oversubscribed three times, which shows the confidence of the investors.”
Foreign demand for Indian stocks helped lift the benchmark BSE India Sensitive Index this month to its highest level in three years. Inflows this year have risen to $3.33 billion, surpassing the previous January record of $2.18 billion set last year, the data show.
Axis Bank is the second-best performer in the 14-stock Bankex index over the last six months.
As part of the offering, the bank planned to make a preferential issue of as many as 6.05 million shares to state-owned financial institutions, including Life Insurance Corp. of India, according to a stock exchange notification on Dec. 27. The placement includes 5.9 million preferential shares, the terms show.
Axis Capital, Citigroup Inc. and JPMorgan Chase & Co. are managing the transaction, two people with knowledge of the matter said yesterday, asking not to be identified because the information is private. The bank began the offering yesterday, it said in a stock exchange filing without giving additional details.