Shares of Dena Bank surged as much as three per cent in the morning trade on Friday after the state-owned lender said it has raised Rs 151.24 crore by issuing preferential shares to Life Insurance Corporation.
The bank has allotted 1.66 crore (1,66,69,453) shares of the face value of Rs 10 each at a premium of Rs 80.73 to LIC on preferential basis, amounting to Rs 151.24 crore.
Reacting to the development, shares of the company opened on a bullish note and then rallied ahead as much as 2.76 per cent over its previous closing price to touch an early high of Rs 89.30 on the BSE.
It was later trading at Rs 89, up 2.42 per cent on the BSE at 1112 hours.
Similar trend was witnessed on the National Stock Exchange as well, where the stock after opening at Rs 87.20, soared to a high of Rs 89.50 and was later quoted at Rs 89.05, higher by 3.01 per cent at 1113 hours.
Following the allotment, the government stake has come down to 55.24 per cent from 58.01 per cent.
Last year, the bank got a capital infusion of Rs 539 crore from the government.
In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks.