Canara Bank gains on raising Rs 2000 cr from QIP issue

Shares of the public sector bank rose 2.78% to Rs 125.90 after it said that the capital planning process committee of the board had approved the closure of the qualified institutions placement (QIP) issue on 10 December 2020.

The sub-committee of the board approved the issue of 19,32,36,714 equity shares at a price of Rs 103.50 per share, aggregating to Rs 2000 crore, to the eligible qualified institutional buyers in the QIP.

The approved issue price is the same as floor price. The QIP issue was open between 7th and 10th of December 2020.

In its placement document filed with the bourses, Canara Bank said that it intends to utilize the net proceeds for augmenting its Tier I capital to support growth plans and to enhance its business, and for general corporate requirements or any other purposes.

Canara Bank is a state-owned commercial bank. The Government of India held 78.55% stake in the bank as of 30 September 2020.

The PSU lender reported 21.8% jump in net profit to Rs 444.41 crore on 44.1% rise in total income to Rs 20,836.71 crore in Q2 September 2020 over Q2 September 2019.

On a year-to-date (YTD) basis, the stock has declined by 43.11% while the benchmark S&P BSE Sensex has added 12.12% during the same period.

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