Allahabad Bank climbs 11% on Rs 2,153 crore capital infusion

NEW DELHI: Shares of Allahabad Bank climbed over 11 per cent in Friday’s trade after the company said it will receive a fresh capital infusion of Rs 2,153 crore from the government in the ongoing financial year.

The stock climbed 10.98 per cent to hit a high of Rs 19.70 on BSE.

The Department of Financial Services in a letter conveyed the sanction for release of the fresh capital infusion fund of Rs 2,153 crore, the state-owned bank said in a regulatory filing.


The capital infusion is towards the contribution of the central government in the preferential allotment of equity shares of the bank during FY20 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 who were approved a total fresh capital infusion of Rs 55,250 crore, as announced on August 30 by the government.

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.

The shares of the company closed 8.17 per cent higher at Rs 19.20 on BSE.