New Delhi: Shares of Allahabad Bank on Friday jumped 11 percent after the company said it will get a fresh capital infusion of Rs 2,153 crore from the government in the current financial year.
The scrip climbed 10.98 percent to Rs 19.70 on the BSE. At NSE, it advanced 10.98 percent to Rs 19.70.
In terms of traded volume, 4.58 lakh shares of the company were traded on BSE and over 71 lakh shares on NSE during morning trade.
The Department of Financial Services in a letter on Thursday conveyed the sanction for release of the fresh capital infusion fund of Rs 2,153 crore, Allahabad Bank said in a regulatory filing.
The capital infusion is towards contribution of the Central government in the preferential allotment of equity shares of the bank during the financial year 2019-20 as the government's investment, it said.
Infusion of the capital into the bank by the government comes ahead of the merger with Indian Bank and it will help the bank meet the regulatory requirement to get amalgamated with a bigger peer.
Notably, Allahabad Bank had not featured in the list of banks that were approved a total fresh capital infusion of Rs 55,250 crore, as announced on August 30 by the government.
In this list, Punjab National Bank was approved to get Rs 16,000 crore, Union Bank of India Rs 11,700 crore, Canara Bank Rs 6,500 crore and Indian Bank Rs 2,500 crore.
Besides, Bank of Baroda got a capital infusion of Rs 7,000 crore, Indian Overseas Bank Rs 3,800 crore and Central Bank of India Rs 3,300 crore.
This round of capital infusion was intended to enhance the capital base of public sector banks so that they could accelerate lending in a bid to bolster growth.
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Updated Date: Dec 27, 2019 13:37:26 IST