Rakesh Jhunjhunwala-owned PSB stock hits 52-week high in a weak market

Canara Bank hit a 52-week high of Rs 178.90, up 3 per cent on the BSE in Friday's intra-day trade

Shares of Canara Bank hit a fresh 52-week high of Rs 178.90, up 3 per cent on the BSE in Friday’s intra-day trade, in an otherwise weak market. The market price of public sector undertaking (PSU) bank surpassed its previous high of Rs 177.40, touched in Thursday’s intra-day trade.

The stock was quoting higher for fifth straight day and has rallied 13 per cent during the period. In comparison, the S&P BSE Sensex was 0.72 per cent at 58,699 points at 01:38 pm. In the past one week, the benchmark index has recorded 2.2 per cent decline, data shows.

Ace investor Rakesh Radheshyam Jhunjhunwala held 28.85 million equity shares or 1.59 per cent stake in Canara Bank as on August 24, 2021, according to the shareholding pattern data filed by the Bank.

Last month, Canara Bank had raised Rs 2,500 crore through qualified institutional placement (QIP). It had issued 167.39 million equity shares to qualified institutional buyers (QIB) at a price of Rs 149.35 per share. With the past one week's rally, the stock is currently trading 20 per cent higher against its QIP issue price.

Canara Bank said it intends to utilize the net proceeds towards augmenting the Bank’s Tier I capital to support growth plans and to enhance the business of the Bank.

Meanwhile, on Wednesday, September 29, 2021, rating agency CRISIL Ratings upgraded the Bank's Tier I Bonds (under Basel III) to 'CRISIL AA+/Stable' from 'CRISIL AA/Stable'. CRISIL Ratings has also reaffirmed its 'CRISIL AAA/Stable/CRISIL A I+' ratings on the Tier II Bonds (under Basel III) and Lower Tier II bonds (under Basel II), and the short-term rating on the certificate of deposit.

“The upgrade in the rating of Tier I bonds (under Basel III) factors in the improved position of Canara Bank to make future coupon payments, supported by proposed adjustment of accumulated losses with share premium account, and the improved capital ratios of the bank. Pursuant to the proposed adjustment, the eligible reserves to total assets ratio for the bank will improve,” CRISIL Ratings said in rating rationale. CLICK HERE FOR DETAILS