Allahabad Bank turns volatile on plan to divest stake in insurance JV

Allahabad Bank was up 0.19% to Rs 77.20 at 10:48 IST on BSE after the bank indicated that it may divest its stake in insurance joint venture Universal Sompo General Insurance.

Meanwhile, the BSE Sensex was up 40.82 points, or 0.16%, to 26,186.49.

On BSE, so far 1.23 lakh shares were traded in the counter, compared with an average volume of 2.13 lakh shares in the past one quarter.

Trading in the counter was volatile. The stock rose 2.21% at the day's high of Rs 78.75 so far during the day. The stock rose 0.19% at the day's low of Rs 77.20 so far during the day.

The stock hit a 52-week high of Rs 136.55 on 5 December 2014. The stock hit a 52-week low of Rs 72 on 9 November 2015.

The stock had outperformed the market over the past one month till 30 November 2015, rising 2.73% compared with 1.92% decline in the Sensex. The scrip had, however, underperformed the market in past one quarter, falling 7.83% as against Sensex's 0.93% decline.

The mid-cap company has an equity capital of Rs 600.56 crore. Face value per share is Rs 10.

Allahabad Bank announced after market hours yesterday, 30 November 2015, that a meeting of its board of directors will be held on 4 December 2015, to consider floating request for proposal for appointment of consultant for advising and undertaking redrafting of existing shareholders agreement forming insurance the joint venture of bank namely Universal Sompo General Insurance Company so as to align the same with amended Indian Insurance Laws.

Presently, the shareholding of Allahabad Bank in Universal Sompo General Insurance Company is 30%. The board of directors may also consider partial/complete disinvestment of the bank's stake in the insurance joint venture in compliance with the applicable laws, rules and regulations as amended.

Allahabad Bank's net profit rose 25.2% to Rs 177.10 crore on 1.8% decline in operating income to Rs 5317.06 crore in Q2 September 2015 over Q2 September 2014.

Government of India holds 62.73% stake in Allahabad Bank (as on 30 September 2015).

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