Karur Vysya Bank board approves rights issue

Karur Vysya Bank (KVB) on Monday got an approval from its board for the proposed Rs 450-crore rights issue. According to the bank’s statement to the Bombay Stock Exchange (BSE), the committee of board of directors of the bank, at its meeting held on Monday, finalised the opening and closing dates of the issue as February 28 and March 15, respectively.

Managing Director & CEO P T Kuppuswamy said the price per share for the issue had been set at Rs 150 and existing shareholders could get two shares for every five held.

He had earlier said the bank was planning to raise around Rs 300-325 crore before March and the remaining would be raised by May. The bank’s capital adequacy ratio (CAR) stands at 14 per cent and the proposed fund raising would help it over the next two years. It is targeting total business of Rs 50,000 crore by March 31, 2012.

“By 2016, our business target is Rs 1.25 lakh crore, including Rs 75,000 crore in deposits and Rs 50,000 crore as advances. To support this, we may have to increase our net-owned funds to Rs 4,000-5,000 crore from the current Rs 2,100 crore, which includes the proposed Rs 450-crore rights issue”, said Kuppuswamy. As on March 31, 2010, the bank’s total business was at Rs 32,946.85 crore, up 28.38 per cent year-on-year.

About expansion, he said the bank had 360 branches, which would be increased to 450 next year and then to 800. The number of employees stood at 4,400 and would double by 2015, he said.