Shares of Bank of Maharashtra fell 7% to Rs 28.16 in heavy volume in intraday trade on Friday after listing new shares allocated to qualified institutional buyers (QIBs). Shares of the state-owned bank fell below the issue price of Rs 28.5 allocated through a qualified institutional placement (QIP).

The stock was quoted 6% lower at Rs 28.44 at 10:11 am, while the S&P BSE Sensex was down 0.01%. The average trading volume of counters jumped 1.5 times. A total of 29 million shares changed hands on the NSE and BSE.

Under the QIP, the Board of Directors of Bank of Maharashtra allocated 350.88 million equity shares of Rs 10 each to QIB on Tuesday, June 6, 2023. The bank has raised Rs 1,000 crore through the QIP, which opens on June 1 and closes on June 6, 2023.

Qualified investment projects were fully subscribed, and domestic and foreign institutional investors responded strongly, highlighting the representation and demand for global diversification.

Bank of Maharashtra said in an exchange filing that the Life Insurance Corporation of India allocated 83.41 million shares or 23.77% of the total size of the QIP. Also, Aditya Birla Sun Life Insurance Company (45.04 million shares) and Bajaj Allianz General Insurance Company (36.70 million shares) have allotted more than 10% of the total issue size.

The bank intends to use the net proceeds to increase the bank’s Tier 1 capital to meet additional requirements for the capital protection buffer, support growth initiatives, and enhance the bank’s business.