Indian Bank shares gained as much as 2.3 per cent on Tuesday, after the public sector lender said it plans to raise Rs 1,100 crore to meet the Basel III capital adequacy norms.
A decision on the proposed fund-raising will be taken in board meeting on January 19, Indian Bank said.
As of September 30, 2015, Indian Bank's capital adequacy ratio stood at 12.58 per cent as per the Basel III norms.
Many banks have been raising money in their run-up to full Basel-III compliance by March 2019.
The Basel-III norms have been introduced in the Indian banking system since 2013 in a phased manner, with an aim to improve and strengthen regulation, supervision and risk management within the banking sector.
A Fitch Ratings report in December had said banks in India will need about $140 billion to ensure full compliance with the Basel III norms by 2018-19.
Indian Bank shares closed 5.37 per cent lower at Rs 99.60 apiece compared to 0.58 per cent fall in the broader Sensex.