Shareholders of Bank of Baroda will meet next month to consider issuing up to 100 million new shares under Employee Share Purchase Scheme (ESPS).
An extraordinary general meeting of the shareholders will be held on January 21 to consider the proposal, Bank of Baroda (BoB) said in a BSE filing Wednesday.
The shareholders will meet to approve issuance of up to 100 million fresh equity shares to employees and whole time directors of the bank in one or multiple tranches under ESPS, it said.
The bank said the issue price under ESPS has to be decided by the board and it will be in a way so that the government holding does not come below 52 per cent.
Out of the total capital raising plan for 2018-19, the bank's board has decided to issue up to 100 million shares with a face value of Rs 2 each, at an appropriate premium, it added.
"The object of the issue, apart from raising of long-term resources is to enable the bank to attract, retain and reward employees for our bank by sharing the value created by them and to motivate them to contribute to the growth and profitability of the company," it said in the filing.
Besides, the fund mop-up aims to shore up the capital adequacy and to fund the general business needs of the bank, it said further.
All permanent employees of the bank including the MD&CEO, and executive directors are entitled to participate in the BoB-ESPS, it added.
Last week, Syndicate Bank said it will raise up to Rs 5 billion by issuing 300 million shares to its staff under the employee stock purchase scheme.
On December 13, Punjab National Bank mobilised Rs 5 billion through ESPS by issuing 100 million new shares to employees.
The government in March 2017 allowed public sector banks to offer stock options to their employees, aimed at retaining experienced hands and better incentives besides a means for raising capital.
A number of public sector banks, including Allahabad Bank, Union Bank, United Bank of India, Oriental Bank of Commerce and Canara Bank, have availed the new scheme to raise funds.
Stock of Bank of Baroda was trading 0.26 per cent up at Rs 115.65 on BSE.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)