Dena Bank to raise Rs. 366 crore from General Insurance, LIC in preferential issue

After the issue, government shareholding in the bank will come down to 58.01 per cent, from 66.57 per cent in December 2013, it said.

With the capital infusion of Rs. 700 crore during the third quarter of the current fiscal year, government shareholding in the lender rose to 66.57 per cent from 55.24 per cent earlier.

It may be noted that the banks are trying to meet a stiff target to comply with the capital-intensive Basel-III framework, which is being implemented in a phased manner in the country till 2018.

The government exhausted its Rs. 14,000-crore recapitalisation budget for various PSU banks in the current fiscal year and later allowed them to tap other sources to raise the capital.

State Bank of India, the largest lender in the country, was the first to exercise this option and raised Rs. 8,032 crore through an institutional placement of shares.

The response received by the SBI's QIP issue in tepid market conditions prompted some lenders to redraw their strategies and adopt others routes, including the preferential allotment of shares.  

As of 2:44 p.m., shares in Dena Bank were trading at Rs. 56.30 apiece on the BSE, up  0.72 per cent from the previous close.