Central Bank of India shares hit 5% upper circuit on fundraising plan

/ 2 min read

The PSU bank to raise up to ₹1,500 crore this fiscal, with a base issue size of ₹500 crore and a green shoe option of up to ₹1,000 crore.

Central Bank of India hits 5% upper circuit of ₹32.35 on the BSE
Central Bank of India hits 5% upper circuit of ₹32.35 on the BSE

Shares of Central Bank of India were locked in 5% upper circuit on the domestic bourses on Tuesday after the public sector lender unveiled a fundraising plan. The PSU bank in an exchange filing said its board of directors has approved raising up to ₹1,500 crore during the current fiscal through the debt market. The base issue size is ₹500 crore with a green shoe option of up to ₹1,000 crore.

ADVERTISEMENT

As per the exchange filing, Central Bank of India will raise capital through the issuance of non-convertible redeemable unsecured Basel Ill compliant tier 11 bonds, subject to market conditions and necessary approvals. Under the Basel-III capital regulations, the minimum capital requirements for banks globally have been raised from 2% in Basel II to 4.5% of common equity, to withstand future periods of stress.

“To raise capital through issuance of Non-convertible redeemable unsecured Base Ill compliant Tier 11 Bonds for amount upto ₹1500/- Crore with a base size of ₹500/- Crore and a green shoe option upto ₹1000/- Crore during the FY 2022-23 subject to market conditions and necessary approvals,” Central Bank of India said in a BSE filing.

Boosted by the fundraising plan, shares of Central Bank of India opened 3.7% higher at ₹32, against the previous closing price of ₹30.85 on the BSE. Extending opening gains, the banking stock hit a 5% upper circuit of ₹32.35, while the market capitalisation climbed to 28,083 crore.

The PSU bank stock trades 23% lower than its 52-week high of ₹41.80 touched on December 14, 2022, while it hit a 52-week low of ₹16.10 on May 16, 2022. On the year-to-date (YTD) basis, the share has risen more than 50%, while it has rallied nearly 89% in the past six months. In one month, the state-owned lender has gained 27%, while it has fallen 12% in a week.

Recommended Stories

For the second quarter ended September 30, 2022, Central Bank of India reported a 27% year-on-year (y-o-y) increase in net profit at ₹318 crore, against ₹250 crore in the year-ago period. The profit was driven by higher net interest income and lower provisions.

Net interest income rose 24.5% YoY at ₹2,747 crore versus ₹2,206 crore in the year-ago period. Non-interest income, however, dropped 12% YoY to ₹910 crore as against ₹1,034 crore in the same period last year, dented by a decline in treasury income and other receipts (priority sector lending certificates and others).

ADVERTISEMENT

On the asset quality front, the gross non-performing assets (NPAs) declined to 9.67% of gross advances in Q2 FY23, against 14.90% in the preceding quarter. The bank made a technical write-off of ₹9,514 crore during the quarter under review. Net NPAs too declined to 2.95% of net advances, compared with 3.93% in the same period last year. 

Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.

Most Powerful Women In Business 2025
View Full List >