Underperforming bank shares rally after promoter proposes $10 million fund infusion
DCB Bank's Switzerland-based promoter currently holds a 14.03% stake in the lender as of the end of the September quarter. It plans on making the capital infusion by subscribing to additional equity shares of the bank.
Shares of private lender DCB Bank Ltd. rose as much as 5% on Tuesday after its promoter - Aga Khan Fund for Economic Development (AKFED) expressed interest to invest up to $10 million to strengthen the bank's capital and fuel its growth plans.
The bank will hold a board meeting on December 8 to consider this proposal.
DCB Bank's Switzerland-based promoter currently holds a 14.03% stake in the lender as of the end of the September quarter. It plans on making the capital infusion by subscribing to additional equity shares of the bank.
The bank’s capital-to-risk (weighted) assets ratio (CRAR) was at 16.55% as of September 30, 2023, excluding the corresponding half-year net profit.
The Tier I capital stood at 14.28%, while the Tier II capital was 2.27%.
Earlier in July, the RBI had given approval to Tata Asset Management Pvt. Ltd to acquire aggregate holding of up to 7.5% of DCB Bank through the schemes of Tata Mutual Fund. The Fund holds 5.50% stake as of September 30.
Shares of DCB Bank are marginally off the day's high but are trading 3.6% higher at ₹116.95. The bank's shares have been underperformers in 2023, currently down 8% so far. It has delivered negative annual returns to shareholders in three out of the last four years.
(Edited by : Hormaz Fatakia)
First Published: Dec 5, 2023 11:32 AM IST
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