KOCHI/February 21, 2024: The South Indian Bank (SIB) board has today decided to price its forthcoming rights issue, opening on March 06, at Rs22 apiece against the face value of Re1, thus charging a premium of Rs21 per share.
As per the board proposal, one rights share will be issued against every four shares held by the SIB shareholder (1:4) as on February 27, which has been fixed as the record date or cut-off date for the eligibility to take part in the rights issue.
The bank seeks to issue 52.3 crore shares to raise Rs1,151 crore through this rights issue assuming full subscription. The pricing of the rights issue at Rs22 per share works out a 33 per cent or Rs10.70 discount to today’s closing price of Rs32.70 (on NSE).
The issue that is expected to open on March 06 will remain open for 15 days before closing on March 20, 2024.
The 1:4 rights issue proposed by SIB will see its share capital grow from Rs209.27 crore to Rs261.59 crore assuming full subscription. This will help the bank build a strong capital position thus equipping the Thrissur-based nonagenarian lender for a stronger growth in its asset base, according to analysts.
SIB enjoyed a comfortable Capital to Risk Weighted Asset Ratio (CRAR) of 17.25 per cent as on March 31, 2023 compared with 15.86 per cent a ayear earlier.
A board meeting on December 27, 2023 had “approved the offer and and issuance of fully paid-up equity shares of the bank the Rights Equity Shares for an amount not exceeding Rs1,750 crore , by way of a rights issue.”
