Axis Bank, the third-largest private sector lender in India, is reportedly mulling plans to sell around 4.58 crore new shares in order to meet Basel III norms.

The share sale is expected to generate more than Rs 6,000 crore for the lender, allowing it to boost its capital before the so-called Basel III norms kick in.

Kajal Gandhi, an analyst at ICICI Securities, said, "The capital raising is largely to fund growth and also to meet Basel-III norms. Other private sector banks like YES Bank and IndusInd Bank have also raised funds recently."

Axis said the equity issuance by it would lead to a 10.75 per cent dilution. The private sector lender also announced that the fund-raising plan had already been approved by its board.

The bank retains the options to sell shares to retail investors, institutions or to announce a GDR issue. The lender also retains the right to sell the shares to existing holders.

Axis Bank, headed by Shikha Sharma, is not the going to be the first private sector lender to raise funds through share sale. Earlier this year, IndusInd Bank raised funds through share sale, while City Union Bank's rights share sale is in progress. Development Credit Bank and YES Bank are also preparing to raise equity.

The Reserve Bank of India is advancing with its plan to implement the so-called Basel III norms to avert a repetition of the 2008 financial crisis. Basel III norms prescribe private sector banks to have tier-I capital or equity capital if 7 per cent, while Axis Bank's equity capital is currently at 8.99 per cent.