State-run lender UCO Bank is allotting around 60.8 million equity shares to Life Insurance Corporation of India on a preferential basis, which is expected to fetch as much as Rs 400 crore (approximately $65 million) at the current market price.
In a meeting held on February 5, the board of directors approved the fundraise at a price which is yet to be determined. The proposal of the fundraise is now subject to necessary approvals from Reserve Bank of India and shareholders of the bank, the BSE disclosure said.
Currently, LIC owns around 8.6 per cent stake in UCO Bank, while 77.2 per cent stake in held by the government of India.
Meanwhile, the company posted a decline 3.4 per cent in net profit to Rs 303.6 crore in the December quarter against Rs 314.5 crore in the year-ago period.
Operating income grew 1.25 per cent to Rs 4,787.59 crore in the quarter against Rs 4728.57 crore during the quarter ended December 2013.
As of March 31, 2014, the company, formerly known as The United Commercial Bank Ltd, operated a network of 2,890 branches in India, two branches in Singapore, and two branches in Hong Kong and 2,085 ATMs.
Shares of the bank closed at Rs 68.35 per unit, down 5.66 per cent on the BSE from their previous close in a weak Mumbai market.
(Edited by Joby Puthuparampil Johnson)