Central Bank of India to raise Rs 2,500 cr from rights issue

State-owned lender Central bank of India on Wednesday said it proposes to raise about Rs 2,500 crore from rights issue for which it has fixed record date.

The board of the bank has approved Rs 103 as issue price for every right equity shares, Central Bank of India said in a filing to the Bombay Stock Exchange (BSE).

Besides, the bank has fixed March 18 as record date for the purpose of ascertaining shareholders entitled for rights issue. Rights issue are offered to the existing shareholders.

The bank has proposed to issue equity shares on a rights basis in the ratio of 3 scrips for every 5 shares held, it said.

The bank is proposing to offer 24,24,84,876 shares of face value of Rs 10 each in addition to the present, paid up capital of 40,41,41,460 equity shares which is considered for determining the number of shares in the rights issue, it said.

On application, Rs 10 per equity share will go towards share capital and Rs 93 per share will go towards premium account, it said.

The government holds 80.2 per cent in the Central Bank of India. Hence, it will make a capital infusion of Rs 2,016 crore by subscribing to the rights issue. The bank is likely to raise money by this month-end.

Rights issue of the bank is a part of recapitalisation package announced by the government last year.

The government had announced a capital infusion of Rs 6,211 crore in five public sector banks, including Rs 2,016 crore capital support to Central Bank of India, with the objective of raising Tier-I capital of over 8 per cent.