Punjab National Bank approves 1:5 share split

MUMBAI: Punjab National Bank ( PNB) has said its plans to split its stock in ratio of 1:5 which would mean that the face value of its shares would be Rs 2 as against Rs 10 now making it more affordable to retail investors. The board of government owned bank also approved plans to raise equities either by way of private placement to institutional investors or through a follow-on issue or through a rights issue.

This will make PNB first government owned bank to announce a stock split. Among private banks, ICICI Bank had recently announced five for one stock split while other banks like HDFC Bank has split its stock in ratio of five for one and Kotak Mahindra Bank is two for one.

The board of PNB has also approved allotment shares to employees under employees stock purchase scheme (ESPS) or any other similar scheme. State Bank of India is the only other government owned banks to have offered its employees ESPS. In May 2014, SBI raised over Rs 800 crore by offering shares to employees at Rs 1565 per share.

The board of PNB has approved plans to raise Basel III compliant Tier-I Capital bonds. The shares of PNB closed at Rs 985, up 92% over previous closed at the Bombay Stock Exchange. All the board approvals are subject to a nod from Reserve Bank of India and government of India, the bank said ain a notice to the exchange.