Central Bank approaches Sebi for Rs 2,500 cr rights issue

Public sector lender Central Bank of India has filed papers with market regulator Sebi for approval to raise Rs 2,500 crore through a rights issue, which will hit the market this quarter.

According to Sebi data, the bank filed the prospectus for the issue on January 25.

Last month, Central Bank of India Executive Director R K Dubey had said the lender would come out with a rights issue of Rs 2,500 crore and is in the process of finalising the date for the launch of the issue, which will hit the market in the January-March quarter.

The government had approved the rights issue of the lender in June last year. ICICI Securities is the lead manager for the issue.

The government holds an 80.2 per cent stake in the bank and therefore, it will have to subscribe to an equal percentage in the proposed rights issue to retain its present level of ownership.

Central Bank of India reported a 32 per cent increase in net profit for the third quarter ended December 31, 2010, to Rs 403.52 crore on the back of a 96 per cent rise in interest income.

The bank's credit growth stood at 28 per cent for the quarter as against a mere 4 per cent rise in overall deposits.

Shares of Central Bank of India were trading at Rs 172.15 on the BSE today, up 0.23 per cent vis-a-vis the previous close.