CBI drops after board approves preferential issue to LIC of India

Central Bank of India dropped 1.3% to Rs 79.80 at 13:35 IST on BSE after the bank's board of directors considered and approved raising of additional equity capital by issuance and allotment of shares to LIC of India on preferential basis.

The bank made the announcement before market hours today, 8 December 2014.

Meanwhile, the BSE Sensex was down 269.27 points, or 0.95%, to 28,188.83.

On BSE, so far 40,335 shares were traded in the counter, compared with an average volume of 1.41 lakh shares in the past one quarter.

The stock hit a high of Rs 80.85 and a low of Rs 79.70 so far during the day. The stock hit a 52-week high of Rs 88.85 on 9 June 2014. The stock hit a 52-week low of Rs 43.05 on 24 February 2014.

The stock had outperformed the market over the past one month till 5 December 2014, rising 13.71% compared with 1.94% rise in the Sensex. The scrip had also outperformed the market in past one quarter, gaining 29.46% as against Sensex's 5.3% rise.

The large-cap bank has an equity capital of Rs 1421.52 crore. Face value per share is Rs 10.

Central Bank of India said that the Capital Raising Committee of the board of directors of the bank considered and approved raising of additional equity capital by issuance and allotment of, upto 8.28 crore shares of the face value of Rs 10 each at the issue price of Rs 75.55 per share determined as per SEBI (ICDR) Regulations aggregating to Rs 626.23 crore to Life Insurance Corporation of India (LIC of India) on preferential basis, subject to approval of Government of India, Reserve Bank of India, shareholders and other statutory authorities (if any). Capital Raising Committee of the board of directors also decided to hold an Extra-Ordinary General Meeting (EGM) of shareholders on 30 December 2014 to consider and pass the necessary Special Resolution and fixed 28 November 2014 as the relevant date for the purpose of determining the issue price as per SEBI (ICDR) Regulations, 2009.

The issue price of Rs 75.55 per share to LIC of India is at a discount of 5.32% to the ruling price.

Central Bank of India reported net profit of Rs 102.91 crore in Q2 September 2014 compared with net loss of Rs 1508.74 crore in Q2 September 2013. The bank's total income rose 12.6% to Rs 7021.10 crore in Q2 September 2014 over Q2 September 2013.

The Government of India holds 84.2% stake in the bank as at 30 September 2014. LIC of India holds 10.04% stake in the bank as at 30 September 2014.

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