The Securities and Exchange Commission of Pakistan (SECP) has approved The Bank of Punjab (BOP) to issue up to 523,560,209 ordinary shares worth a maximum of Rs20 billion to the Government of Punjab through an offer other than a rights issue. The approval represents the first tranche of a wider capital injection plan intended to provide additional capital to the provincial government-owned bank. Under the approved terms, the issue price will be the higher of Rs38.20 per share or the prevailing market price with a 5% premium. The decision follows a special resolution passed by BOP shareholders at an Extraordinary General Meeting held on September 8, 2026, along with the documents and information submitted to the regulator. The bank initially submitted its application on September 10, with subsequent correspondence dated October 23, 2026.
The regulatory approval includes specific requirements governing the issuance, recording and reporting of the new shares. BOP must issue the shares exclusively in book-entry form within 60 days from the date of the SECP’s approval. Book-entry issuance means that the shares will be maintained electronically rather than through physical share certificates. The bank is also required to inform both the SECP and the relevant securities exchange within seven days after the shares have been issued. In addition, the recipient of the shares must retain the resulting shareholding, while BOP must submit a report to the Commission immediately after issuance detailing the shares held in blocked status in the Central Depository Company account. These conditions establish a defined timeline for completing the transaction and require the bank to meet its reporting obligations after the allotment.
The SECP stated that its approval was based on the information and supporting documents submitted by the bank. The Commission also clarified that it would not be responsible for any express or implied agreements executed between the issuer and the person or persons receiving the proposed shares. The approval was communicated to the market through a notification submitted to the Pakistan Stock Exchange. The requirements are significant because the transaction involves the issuance of a substantial number of new ordinary shares to a government shareholder. Completion of the process will depend on the bank meeting the stipulated conditions and finalising the issuance within the approved period. The transaction’s pricing formula also establishes Rs38.20 per share as the minimum issue price, unless the prevailing market price plus the specified 5% premium results in a higher amount.
The approved Rs20 billion share issue forms part of a broader capital injection of up to Rs30 billion announced by the Punjab government for Bank of Punjab. The bank’s Board of Directors approved the capital injection at its 334th emergent meeting on August 7, 2026. Under the proposed arrangement, the government will subscribe to newly issued ordinary shares in two tranches. The first tranche, worth up to Rs20 billion, is scheduled to be completed by December 31, 2026, while the remaining balance is planned for completion by June 30, 2027. The SECP’s approval covers the first tranche and provides the regulatory basis for BOP to proceed with the share issuance, subject to the conditions specified in the approval. The overall plan is intended to strengthen the bank’s capital position through additional equity subscribed by its provincial government shareholder.
BOP shares had also attracted significant trading activity before the board’s capital injection decision became public in August. During the three trading sessions of August 5, 6 and 7, the stock gained close to 9%, with cumulative trading volume reaching approximately 158 million shares. This was more than six times the stock’s ordinary turnover over a comparable three-session period. Trading volume peaked at around 66 million shares on August 6, when the stock closed at Rs36.00. On August 7, the share price reached an intraday high of Rs36.85. On August 10, when the board decision became public, the stock was trading at Rs35.75, approximately 6% to 7% below the Rs38.20 minimum issue price specified under the capital injection terms. These historical trading figures provide context for the market activity surrounding the announcement, although they do not establish the reasons behind individual trading decisions.
The latest approval marks a further step in Bank of Punjab’s planned capital raising process. The first tranche will allow the Punjab government to subscribe to new shares worth up to Rs20 billion, while the second tranche is expected to take the overall injection to as much as Rs30 billion by June 2027. For BOP, the transaction will increase its issued share capital once completed, while the government will receive additional ordinary shares in return for its investment. The final issue price will be determined under the approved pricing formula, and the bank must comply with the issuance, notification and reporting timelines set by the SECP. Market participants will be watching for the completion of the first tranche and subsequent updates on the remaining capital injection as the bank advances the process during the 2026-27 financial year.
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