Central Bank of India hits 5% upper circuit on fundraising

Shares of state-owned Central Bank of India hit an upper circuit of 5% at ₹32 in Tuesday’s intraday trade on BSE after its board of directors approved raising up to ₹1,500 crore this fiscal by issuing Basel III compliant bonds.

The board of directors considered and approved raising capital through the issuance of non-convertible redeemable unsecured Basel III compliant tier II bonds for an amount up to ₹1,500 crore, the bank said in a regulatory filing.

The base issue size is ₹500 crore with a green shoe option of up to ₹1,000 crore. Under the Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.

On a year-to-date basis, shares of the Central Bank of India have risen over 50%, while it has surged nearly 88% in the last six months.

The Bank is trading above seven out of eight simple moving averages.

Central Bank of India is a public sector bank wherein the Government of India holds a 93.08% stake in the lender.

In Q2FY23, Central Bank of India reported a 27% rise in net profit to ₹318 crore over the same period last year. The net profit was ₹250 crore in the second quarter of last year.