UCO Bank will raise Rs 270 cr by issuing shares to LIC

UCO Bank is going to raise more than Rs 270.59 crore by issuing shares to state-owned life insurer LIC on preferential basis. At the general meeting held on Saturday, shareholders approved the issuance of 7,17,00,000 equity shares to Life Insurance Corporation of India (LIC) at an issue price of Rs 37.74 per share, as per UCO Bank’s regulatory filing. LIC holds 10.38 per cent in UCO Bank and after the preferential allotment of extra 7.17 crore shares, its shareholding in the bank will rise to 14.50 per cent of the total equity capital. Subsequent to the present issue to the LIC, the public shareholding will grow from 19.64 per cent 23.33 per cent and the shareholding of Government will reduce from 80.36 per cent to 76.67 per cent.

On the intent of preferential allotment of shares to LIC, R K Takkar, the Managing Director & Chief Executive Officer informed shareholders that the bank needs capital for meeting Basel III norms and also to comply with minimum public shareholding norms. In 2014, Finance Minister, Arun Jaitley had said the government would bring down its stake in public sector banks to 52 per cent so as to meet Rs 3 lakh crore capital requirement of the banks and to better serve the agenda of financial inclusion.

During the second half of the trading session, UCO Bank share price was trading at Rs. 33.35, up by 1.06 per cent. The stock touched the day’s high and low at Rs. 33.70 and Rs. 33.30. Around 2,34,836 shares are traded in the counter with a traded value of Rs. 78.32 lacs, as per NSE.

Dynamic Levels have identified UCO Bank as one of the top 500 performing stocks for this quarter owing to its strong fundamentals.

For further details, refer to UCO Bank share price forecast.