Public sector lender Allahabad Bank on Thursday said shareholders have approved the bank’s plan to issue 5 crore shares to employees under its Employee Share Purchase Scheme (ESPS).
Public sector lender Allahabad Bank on Thursday said shareholders have approved the bank’s plan to issue 5 crore shares to employees under its Employee Share Purchase Scheme (ESPS). The bank had held an extraordinary general meeting on January 17, in which 98.35% of the votes cast by shareholders were in favour of the resolution. Shares of the bank on the BSE closed at rS 69.85 on Thursday, down 2.65% from its previous close. At this price, the bank would be able to raise rS 349.25 crore by selling 5 crore shares to its employees. The item on the meeting’s agenda read, “to create, grant, offer, issue and allot up to 5,00,00,000 (five crore) equity shares of face value of Rs 10 each, ranking pari passu with the existing equity shares of the bank for all purpose and in all respect including payment of dividend, under an Employee Share Purchase Scheme in one or more tranches at such price or prices, and on such terms and conditions as may be decided by the Board/ Committee in its absolute discretion”.
In November last year, FE had reported that Allahabad Bank was planning to raise Rs 350 crore by issuing shares to its employees under the employee stock purchase scheme (ESPS), quoting its MD & CEO Usha Ananthasubramanian. She had added that the plan was approved by the finance ministry and the Reserve Bank of India (RBI); however, the bank was awaiting a nod from the Securities and Exchange Board of India (Sebi). “It may not happen in this quarter but it should be done by the first quarter of the next calendar year (CY2018),” she had said then. Ananthasubramanian had said that the lock-in for the purchase programme is expected to be one year. “If the shares are doing well, even at Rs 10 more, you can make money and walk out,” she had said, adding that the plan was to develop employees as a class of investors. —Fe Bureau