Mumbai, March 9: The Central Bank of India will offer its existing shareholders three stocks for every five held by them at a price of Rs 103 per share.

Central Bank’s committee of directors had met on March 8 to finalise the terms of the rights offer, it told the stock exchanges today.

The nationalised bank said it would offer nearly 24.25 crore shares in addition to the paid-up capital of over 40.41 crore shares.

S. Sridhar, chairman and managing director of the Central Bank of India, had earlier said the bank hoped to raise close to Rs 2,500 crore from the rights issue.

The government is expected to subscribe fully to the extent of its shareholding in the proposed issue. The Centre now holds 80 per cent in the nationalised bank. The rights issue is expected to take the Tier I capital adequacy ratio of the bank to over 8 per cent. The bank’s capital adequacy ratio (CAR) is now at 6.10 per cent. CAR is the percentage of the bank’s capital to its risk-weighted assets and one of the important measures of a bank’s health.

Other issues

Besides the Central Bank, rights issues are on the anvil from the State Bank of India (SBI) and the State Bank of Bikaner and Jaipur.

The SBI wants to raise up to Rs 20,000 crore through the rights issue.

While the issue was earlier slated to hit the markets this fiscal, it is now likely to come in the early part of 2011-12 as the bank needs to obtain approval from the government.

The government, which owns 59.4 per cent in the SBI, will have to pay up to Rs 12,000 crore to subscribe to the issue. The department of financial services had earlier cleared the issue but because of the large outlay from the government, it required some budgetary support.

The State Bank of Bikaner and Jaipur, the largest associate bank of the SBI, will raise Rs 780 crore through a rights issue.

The bank’s board of directors have fixed March 17 as the record date to ascertain the shareholders entitled to the issue.