Shares of Allahabad Bank climbed as much as 10.9 percent to an intraday high of Rs 19.70 apiece on Friday. The surge comes a day after the public-sector lender said that it will get a fresh capital infusion of Rs 2,153 crore from the Government in the present financial year.
On Thursday, Allahabad Bank in its regulatory filing informed the exchanges that the Department of Financial Services has conveyed the sanction for release of the fresh capital infusion fund of Rs 2,153 crore.
"In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we have to inform you that the Government of India, Ministry of Finance, Department of Financial Services,".... "has conveyed the sanction of the President of India for release of fresh capital infusion fund of Rs 2, 153.00 crore towards contribution of the Central Government in the preferential allotment of equity shares (Special Securities/Bonds) of the Bank during the financial year 2019-20, as Government's investment," it said.
The fresh capital infusion by the government comes ahead of the bank's merger with Indian Bank and will help it meet the regulatory requirement to get amalgamated with a bigger peer.
It can be noted that Allahabad Bank was not in the list of banks who were approved a total fresh capital infusion of Rs 55,250 crore announced by the Finance Ministry in 30 August.