Canara Bank's Rs 1,124 cr rights issue to open on March 2

New Delhi: State-owned Canara Bank's Rs 1,124 crore rights issue will open on March 2 and the proceeds will be utilised to fund business growth.

The bank will issue over 5,42,99,105 equity shares of face value of Rs 10 each for cash at Rs 207 per scrip (including a premium) for an aggregate amount of up to Rs 1,123.99 crore to the existing investors.

The issue will open on March 2 and close on March 16, as per the offer document filed by the company with markets regulator Securities and Exchange Board of India (Sebi).

In a rights issue, shares are issued to existing investors as per their holding at a pre-determined price and ratio.

"The objects of the issue are to augment our capital base to meet the business and capital requirements and growth in our assets," Canara Bank said.

The issue is being managed by SBI Capital Markets Ltd.

Last September, the bank had given its approval to raise an amount not exceeding Rs 1,128 crore including premium by way of rights issue with the Government of India contribution of Rs 748 crore and Rs 380 crore from the public shareholders.

The government currently holds 66.30 percent stake in the bank. In case, the government does not want to dilute its stake, it has to subscribe rights issue equivalent to its shareholding.