LIC-backed multibagger bank stock trading below Rs 50 announces rights issue at a substantial discount of 34 per cent; Don't miss out!

Bank has seen significant interest from institutional investors, with Life Insurance Corporation of India holding 53,369,232 shares

In the midst of heightened market volatility, exemplified by the NSE benchmark Nifty 50 index dipping below the 22,000 mark, and a notable downturn in the banking sector, one particular banking stock stands out amidst the tumult. South India Bank has garnered attention on the bourses with its recent announcement of a Rights issue of shares, approved by its board of directors.

The Rights issue entails the issuance of 5,231,85,254 Rights Equity Shares, each on a fully-paid-up basis, totaling an amount of up to Rs 1,151.01 crores (assuming full subscription with respect to Rights Equity Shares). Priced at Rs 22 per share, the Rights entitlement ratio stands at 1 Rights equity share for every 4 full paid-up equity shares of the Bank held by eligible equity shareholders as of the record date, set for Tuesday, February 27, 2024. The Rights issue is scheduled to open on Wednesday, March 6, 2024, and close on Wednesday, March 20, 2024.

As the stock currently trades at Rs 33.50, the Rights issue price of Rs 22 per share presents a substantial discount of approximately 34.3 per cent. Notably, South India Bank has seen significant interest from institutional investors, with Life Insurance Corporation of India holding 53,369,232 shares. The stock has delivered impressive returns, with a multibagger growth of 101.5 per cent over the past year and a staggering surge of nearly 288 per cent over the last three years.

In light of these developments, the question arises: Would you consider applying for the rights issue? Share your thoughts in the comments below.

Disclaimer: The article is for informational purposes only and not investment advice.