Allahabad Bank is looking to raise up to Rs 1,000 crore through issue of equity shares to the Centre on a preferential basis.
In a late evening filing on BSE on Tuesday, the bank said it has decided to convene an extraordinary general meeting (EGM) on March 10 to get approval of shareholders by the way of special resolution for raising equity capital of the bank through preferential issue of equity shares to the government, aggregating up to Rs 1,000 crore (including premium).
The bank said the EGM was also convened to get shareholder approvals for raising equity capital of the bank, aggregating up to Rs 500 crore (including premium) by way of Qualified Institutions Placement (QIP) in such a manner that the government shall continue to hold not less than 52% of the paid-up equity capital of the bank.
The bank had recently raised Basel III compliant Tier 2 bonds aggregating to Rs 500 crore through Private Placement.
The capital infusions would help the bank to shore up its capital adequacy ratio. Its capital adequacy ratio stood at 9.99% at the end of September quarter this fiscal as per Basel III norms.
According to the latest shareholding pattern of Allahabad Bank, the government holds 58.90% stake in the bank. The EGM was also convened in connection with election of upto three shareholders’ directors of the bank from amongst shareholders other than the Centre.