KVB to raise foreign holding cap to 35 pc

Karur Vysya Bank (KVB) plans to increase the ceiling of holding by foreign instutional investors (FIIs), non resident Indians (NRIs) and foreign direct investments (FDIs) in the equity share capital of the bank to 35 per cent from the current 24 per cent. The move comes in the wake of a recent approval the bank got from Foreign Investment Promotion Board to issue shares worth Rs 107.50 crore to foreign investors.

The bank is planning to raise 25 per cent of its proposed rights issue, worth Rs 450 crore, from foreign investors, according to a senior official of the bank.

It has sought its shareholders’ approval to authorise the board to permit foreign investors to purchase or acquire up to 35 per cent of its paid up capital. The present foreign holding, ie, the shares held by NRIs and FIIs, is 23.3 per cent.

P T Kuppuswamy, managing director and chief executive officer, Karur Vysya Bank (KVB), earlier said it was planning to raise a the Rs 450 crore before May 2011 in two tranches.

Besides, the bank has also lined up plans to raise money, to increase its net owned funds by another Rs 1,900 crore by 2016, its centenary year. The proposed fund-raising plans are to support its business target of Rs 1.25 lakh crore.