PNB approves 1:5 share split to increase liquidity of scrip

Bank's boards in its meeting on Sept 19 discussed various options of raising capital to meet Basel-III norms

State-owned Punjab National Bank (PNB) has approved sub-division of one equity share into five, with the aim to increase liquidity of the scrip.

“The board (of the bank) also considered and granted in- principle approval for spilt of existing equity shares of face value of Rs 10 each into five equity shares of face value of Rs 2 each,” PNB said in a statement on Monday.

Besides, at its meeting on September 19, the board discussed various options of raising capital to meet Basel-III norms, and to fund the general business needs of the bank.

Among the issues discussed were allotment of shares to employees under Employees Stock Purchase Scheme (ESPS) or any other scheme.

It also explored the avenues for raising capital through qualified institutional placement, follow-on public offer or rights issue and raise Basel-III compliant additional tier-I capital bonds.

The above actions are subject to regulatory approvals, including by the government of India.

Meanwhile, another public sector lender Punjab & Sind Bank approved the conversion of perpetual non-cumulative preference shares (PNCPS) of Rs 200 crore, perpetual cumulative preference shares (PCPS) of Rs 200 crore and Innovative Perpetual Debt Instruments (IPDI) of Rs 160 crore held by government, aggregating to Rs 560 crore, into 94.6 million shares.

Besides, it has also obtained approval to allot up to 6.76 crore shares aggregating up to Rs 400 crore to Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC) and subsidiary companies of GIC on preferential basis at a issue price of Rs 59.14 per share.