* Raising up to $877 mln by selling shares to institutional
* Up to $152 mln is being raised from preferential allotment
* Shares are being sold at 1,390 rupees/share, a discount of
(Adds deal details, background)
By Sumeet Chatterjee
MUMBAI, Jan 28 (Reuters) - Indian private sector lender Axis
Bank Ltd is selling shares to raise as much as $1
billion, two sources with direct knowledge of the matter said on
Monday, in the biggest equity deal in more than a month in
Asia's third-largest economy.
The bank is looking to raise up to $877 million by selling
shares to institutional investors and an additional $152 million
by selling shares to some existing shareholders, said the
sources, declining to be named before a public announcement.
The Axis offering is set to be the biggest share sale since
the Indian government raised $1.1 billion by selling some of its
shares in state miner NMDC Ltd in December last year.
Bankers see a pickup in share issues as the government pares
its stake in state companies to bridge its budget deficit, and
private firms tap a revival in investor sentiment to raise
India's share index is up 3.5 percent this year,
having risen 26 percent in 2012.
Axis Bank late on Monday launched the offering of up to 34
million shares to institutional investors at 1,390 rupees a
share, a discount of 1.6 percent to its closing market price of
1,412.95 rupees, the sources said.
Separately, Axis is also allotting up to 5.9 million shares
on a preferential basis at 1,390 rupees a share to some existing
shareholders, they said, adding the bank is looking to raise a
total of about $1 billion from the two tranches.
Proceeds from the offering will be used to boost Axis Bank's
balance sheet, sources had said this month, amid a possible
revival in credit growth, with the central bank expected to cut
interest rates for the first time in nine months.
Citigroup, which topped the Indian equity market league
table last year with a 35 percent share of the market, JPMorgan
and Axis Bank's investment banking unit Axis Capital are
advisers on the deal, the sources said.
Indian companies raised almost $15 billion via equity market
deals last year, up from $8.7 billion in 2011, according to
Thomson Reuters data, with the government share sell down in
state companies accounting for bulk of the issues.
Forthcoming deals include the government's plan to raise up
to $2 billion by selling a stake in state power producer NTPC
Ltd, likely to take place on Feb. 7,
and a follow-on share offering by lender Yes Bank Ltd.
($1 = 53.9 rupees)
(Additional reporting by Indulal P.M. and Abhishek Vishnoi in
MUMBAI and Elzio Barreto in HONG KONG, Editing by Louise