Canara Bank jumped 5.19% to Rs 123.65 after the PSU bank launched a qualified institutional placement (QIP) on Monday (7 December 2020) to raise funds from institutional investors.
The sub-committee of the board - capital planning process of the bank, at its meeting held on 7 December 2020, authorised the opening of the QIP issue and approved the floor price of Rs 103.50 per equity share, the bank said in a regulatory filing. The floor price is at a 11.95% discount to Monday's closing price of Rs 117.55 per share.
"A meeting of the sub-committee of the board-Capital Planning Process of board of directors of the bank is scheduled to be held on Thursday, December 10, 2020 to consider and determine the issue price for the equity shares as well as the number of shares to be allotted to qualified institutional buyers, pursuant to the QIP," the bank said.
The bank's board at its meeting held on 25 September 2020 decided to raise additional equity share capital amounting up to Rs 2000 crore, through QIP route, by issuing such number of equity shares in one or more tranches. "The said QIP issue shall be within the overall maximum limit of board approved capital raising plan (FY 2020-21) of Rs 5000 crore equity share capital," it added.
In its draft placement document filed with the bourses, Canara Bank said that it intends to utilize the net proceeds for augmenting its Tier I capital to support growth plans and to enhance its business, and for general corporate requirements or any other purposes.
Canara Bank is a state-owned commercial bank. The Government of India held 78.55% stake in the bank as of 30 September 2020.
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The PSU lender reported 21.8% jump in net profit to Rs 444.41 crore on 44.1% rise in total income to Rs 20,836.71 crore in Q2 September 2020 over Q2 September 2019.
On a year-to-date (YTD) basis, the stock has declined by 43.92% while the benchmark S&P BSE Sensex has added 10.41% during the same period.
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