Share price of Allahabad Bank zoomed over 8 percent in the early morning trade on December 27 after the government released fresh capital infusion fund of Rs 2,153 crore for the bank.
"Government of India, Ministry of Finance, Department of Financial Services vide their letter dated November 26, 2019 has conveyed the sanction of the President of India for release of fresh capital infusion fund of Rs 2,153 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," the bank said in a filing to the exchanges.
The stock price saw a massive fall of over 60 percent in the last six months and was quoting at Rs 19.25, up Rs 1.50, or 8.45 percent. It has touched an intraday high of Rs 19.70. The stock also witnessed spurt in volume by more than 1.48 times.
The capital infusion is towards contribution of the central government in the preferential allotment of equity shares of the bank during the financial year 2019-20 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.
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