The Central Bank of India plans to raise 2,500 crore through a rights offering at a discount to the market price as the government, sets about infusing capital in state-run banks. The rights issue will bolster the Central Bank’s capital adequacy ratio to close to 14.2% from 11.6% at the end of March 2010. The bank’s tier-I capital will go up from 6.18% to 8.6% after the issue.
The Mumbai-based bank has priced its rights issue at 103 a share. The rights issue is at a ratio of 3:5. The bank’s share has been priced at a premium of Rs. 93. The government, which controls 80% of the stake in the bank will invest 2,016 crore while the remaining 484 crore will be raised from retail and institutional shareholders.
This will be the second rights issue in the banking sector in which the central government is infusing capital. The issue opens for subscription on March 24 and closes on April 7. Among non-government investors, domestic banks and institutions hold around 7.2%, foreign institutional investors around 3.8% and the Life Insurance Corporation holds around 3%.
Company Name | CMP |
---|---|
SBI | 799.55 |
Bank Of Baroda | 245.00 |
Canara Bank | 100.40 |
PNB | 101.55 |
Union Bank Of India | 117.85 |
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