Punjab National Bank (PNB) plans to complete a significant share sale to institutional investors within the next six months as part of an effort to bolster the bank's capital reserves, CEO Atul Kumar Goel has said. 

In December, the bank's board approved a plan to raise Rs 7,500 crore via equity capital. 

This capital increase will be achieved through a qualified institutional placement (QIP), which targets institutional investors and does not extend offers to the general public, Reuters reported.

"For the QIP, we are trying to get all the approvals, but within six months we will try to raise the money from the market," Goel told Reuters. 

An increasing demand for loans has prompted banks, including State Bank of India (SBI), to consider raising equity capital.

Goel has forecasted that PNB's loan growth would hover between 11% and 12% in FY25, a slight increase from the 11.2% year-on-year growth observed for the quarter ended March 2024. The bank also aims to boost its deposit growth to 9%-10% for the fiscal year, up from nearly 7% growth in the previous quarter.

On the corporate front, Goel told Reuters that the bank had a robust loan pipeline of approximately Rs 1 trillion, with Rs 60,000-70,000 crore already sanctioned.

PNB reported a 160% surge in net profit to Rs 3,010.27 crore for the March 2024 quarter, aided by a decrease in loan-loss provisions. 

The bank is focused on further improving its asset quality in the 2024-25 fiscal year, with bad loan recoveries expected to reach around Rs 18,000 crore, Reuters reported. 

Goel also aims to reduce the gross and net non-performing asset (NPA) ratios to below 5% and 0.5%, respectively, by March 2025.

In terms of expansion, PNB plans to open an additional 150 branches this fiscal year, Goel told Reuters.

Furthermore, Goel mentioned that Indian banks are poised to provide feedback on a central bank proposal that seeks to tighten regulations for infrastructure project loans. 

He reassured that the proposed guidelines would not adversely affect project financing and that the bank would be capable of adhering to these new rules if implemented.