Leena Baliga

Mumbai, April 16: CENTURION Bank will call a board meeting following the lukewarm response to its Rs 128.80 crore rights issue at the earliest. The rights issue, which was slated to close on April 12, devolved due to undersubscription.

Sources said that the board meeting is scheduled for this week and will consider the option of enhancing capital and bringing in more funds from existing shareholders. The board will also discuss other issues arising as a result of the rights issue not being subscribed to. In situations wherein a rights issue devolves, the bank supposedly dilutes its stake in promoter’s holding to raise capital. Said a bank official: “The equity holding of the bank is well distributed. Nobody has a huge majority stake.

”The promoter stake — of the Ahujas — in the bank is at 23.11 per cent; 8.36 per is held by the International Finance Corporation (IFC, Washington); 17.71 per cent by Keppel Tatlee Bank of Singapore and 10.22 per cent by the Asian Development Bank (Manila). The public hold about 30 per cent. Citing reasons why the rights issue of the bank devolved, an official said: “When we went in for the rights issue, the share price was at Rs 15-16 per share against the issue price of Rs 12. After the Ketan Parekh scam, the market price went below Rs 12. Market conditions were such that it was beyond control.”

He added that there are limitations in approaching the capital market again but the bank will do so again depending on market sentiment.