Stock in Allahabad Bank jumped more than one per cent in early morning trade on Thursday, Dec. 26, 2013, after the bank announced that it had allotted 4.45 crore equity shares on preferential allotment basis to the Government of India.

In a statement to the Bombay Stock Exchange (BSE), the bank declared that it had allotted a total of 4,45,83,147 equity shares with face value of Rs 10 each for cash at an Issue Price of Rs. 89.72 per equity share including premium of Rs. 79.72 on preferential basis to Government of India

The bank's shareholders had approved the preferential issue of Rs 400 crore to the government in return for capital infusion during a general meeting held in Kolkata earlier this week.

The shareholders also gave a green signal for issuing of equity shares worth up to Rs 320 crore via a qualified institutional placement that will make sure that the promoters' holding remains at 55.24 per cent of the total paid-up capital.

Shubhalakshmi Panse, chairman & managing director of Allahabad Bank said the move would help the bank in improving its capital base to maintain capital adequacy ratio along the lines of the Basel III norms.

Following the announcement, which was made before market hours today, shares of the bank gained 1.13 per cent to Rs 94.25 a piece on BSE. The stock had hit its 52-week high of Rs 190.80 a share on January 18, 2013, and a 52-week low of Rs 64.90 a share on August 28, 2013.

The mid-cap lender has equity capital of Rs slightly more than 500 crore.