** State-run Dena Bank Ltd rises as much as 4.3 pct to 31.80 rupees, its highest level since Sept. 26
** Bank selling shares to institutions to raise between 2.75 billion rupees ($42 million) and 4.25 billion rupees ($65 million), term sheet shows
** Share sale to help improve capital adequacy ratio
** Stock posts biggest intraday pct gain since Sept. 22
** Stock down 6.6 pct this year as of Tuesday's close ($1 = 65.2650 Indian rupees)
