Mumbai, Aug. 23 :    Mumbai, Aug. 23:  Centurion Bank is planning a preferential offer that could raise the stake of Keppel Bank, its Singapore-based partner, and help the Devendra Ahuja-promoted institution push up its capital adequacy ratio to a more comfortable level. The announcement came along with a statement from managing director V. S. Srinivasan that Centurion was not in talks with another private bank for a possible merger, as reported in a business daily recently. Banking circles say Keppel Bank, which holds 17.5 per cent, is likely to pick up the preferential shares in an offer Centurion believes will help it garner Rs 120 crore. The money will be used to expand its capital base and fund growth plans, Srinivasan told reporters here today. 'The board is looking at a private placement or a preferential allotment. It is also considering whether a strategic partner can be roped in.' It was reported earlier this week that the management of Centurion Bank had approached HDFC Bank, the country's second-largest private sector bank, with an offer of an all-stock merger. HDFC Bank had merged Times Bank with itself last year. Keppel Bank, taken over by Singapore's OCBC Bank, holds the Centurion stake through its Mauritius-based investment company, and, therefore, will continue to invest in the way it does now, Srinivasan said. It has indicated its willingness to raise its stake to 20 per cent whenever fresh capital is issued, he added. Centurion, which failed to raise funds through a rights issue this year, has a capital adequacy ratio (CAR) of 9.61 per cent on March 31, Srinivasan said. It is required to maintain at least 9 per cent under RBI norms. Net non-performing assets (NPAs) stood at 2.96 per cent of its total advances, better than the industry average of 8 per cent. Like other private banks, Centurion plans to sharpen its focus on retail customers and increase its retail assets to 50 per cent from 35 per cent. It has bagged licences to open five more branches and intends to add 43 ATMs to its tally of 107. The Centurion share jumped 1.68 per cent to Rs 9.10 on the Bombay Stock Exchange today on report of the capital issue. The Rs 128.08-crore rights issue that came a cropper offered 10.67 crore equity shares of Rs 10 each at a premium of Rs 2 per share in the ratio of seven shares for every 10 held. At the time the rights issue was announced, there was speculation that Keppel Bank wanted to raise its share holding to 20 per cent by subscribing to the share offering. The bank had already obtained the permission from the Foreign Investment Promotion Board (FIPB) for raising Keppel's shareholding to 20 per cent. A couple of years ago, Keppel's stake was reduced from 20 per dent to 17.71 per cent after 20th Century Finance Corporation was merged with Centurion Bank. The bank was keen to enter the insurance sector through a tie-up with Canada Life, but the plan fell through after its prospective partner decided not to go ahead.