Canara Bank is planning to raise Rs 1,520 crore from Life Insurance Corporation of India (LIC) by making a preferential allotment of 40 million equity shares. The Bank’s board of directors has already approved the issue and the Bank is holding an extraordinary general meeting on April 30, 2015 to obtain shareholders’ consent.
The Bank has fixed March 31, 2015 as relevant date in terms of SEBI-ICDR Regulations. The Bank has fixed a minimum issue price of Rs 380.08 per equity share. Post this issue, the Bank’s Tier-I capital will get strengthened. The capital adequacy ratio under Basel-III currently stands at 9.87%.
Currently, LIC holds 7.29% stake in the Bank, which will go up to 14.49% after the preferential allotment. The government of India, which is the main promoter will see its shareholding come down to 64.48% post preferential allotment to LIC from the present level of 69.91%.
