South Indian Bank Ltd. saw its shares rise by over 3% on Thursday following the bank’s approval of its rights issue terms, which had been granted approval in December of the previous year.
The bank aims to raise ₹1,151 crore through the rights issue, provided the rights equity shares are fully subscribed.
According to the terms, the bank will issue 52.31 crore rights shares, each on a fully paid-up basis.
The price for the rights issue has been set at ₹22 per share, representing a discount of nearly 35% compared to the bank’s closing price on Wednesday.
The rights issue for South Indian Bank will commence on March 6 and conclude on March 20.
The record date for the rights issue has been set as February 27.
Existing shareholders of South Indian Bank will be eligible to receive one rights share for every four shares they hold.
A rights issue is a method by which a company raises funds by selling additional shares to its existing shareholders. If an individual does not own shares of the company as of the record date, they are not eligible to participate in the rights issue.
The rights issue will lead to an equity dilution of 25%, while the net worth will increase by 16%.
Following the rights issue, the lender’s tier-I ratio will rise to 16.58% from 13.37%, while the Book value will decrease by 7.2% to ₹31.9 per share.
Shares of South Indian Bank, after peaking at the opening, are currently trading 2.9% higher at ₹33.55.
