Govt to sell 10% stake in Canara Bank

The government is planning to sell its 10% stake in Canara Bank. The bank is also mulling to raise Rs 3,000 crore of hybrid capital.

CNBC-TV18 reports that the bank had earlier declared its intention of raising capital to the tune of Rs 3000-Rs 4000 crore.

But it is not clear as to what will be the equity and hybrid capital part.

The bank's capital adequacy ratio is at 11.22%. Given this it is expected to raise Rs 3000 crore. And the government stake could come down from 73.1% to 63% or 64%.

This means that the part of the issue will be from equity and the balance will come from hybrid capital, mainly from Tier II capital.

The bank is on a growth trajectory. It is raising this money for its overseas expansion.

It is looking at opening its branches in Singapore and Indonesia. It has been outperforming the industry through its credit growth.