LIC raises stake in Central Bank to 15%

Country's largest insurer LIC has raised its holding in Central Bank of India to 15 per cent by picking up another 5.51 per cent stake for Rs 626.23 crore.
LIC bought 8.28 crore shares through preferential allotment raising its stake to 15 per cent, Central Bank of India said in a filing on the BSE.
Prior to the preferential allotment, LIC had 10.4 per cent stake in the bank.
Despite 15 per cent stake, the voting right of LIC would be restricted to 10 per cent as per the provisions of Banking Companies (Acquisition and Transfer of Undertakings) Act 1970.

As per the provisions, no shareholders of a bank other than the central government will be entitled to voting right in respect of any shares held by him in excess of 10 per cent of the total voting rights of all the shareholders of the bank.
Last year, Central Bank of India sold 7.10 crore shares to Life Insurance Corporation of India (LIC) and raised Rs 581.61 crore.

The bank allotted 7,10,75,753 equity shares to LIC subsequent to passing of the special resolution by shareholders at their meeting held on July 15, 2014.
The shares of face value Rs 10 were alloted at Rs 81.83 per unit.

Prior to this, LIC had 5.31 per cent stake in the bank. The government holding was at 88.63 per cent as of June, 2014.