City Union Bank QIP oversubscribed by two times

Bank planned to riase Rs 350 cr to support business growth and CAR

City Union Bank (CUB's) Qualified Institutions Placement issue has reportedly oversubscribed by two times. The Bank was planning to raise around Rs 350 crore by diluting 7% stake. The fund raising is to support Bank's business plan and to address its capital requirements.

Market sources said that Edelweiss was the lead manager for the issue, while other managers include Axis Capital, Kotak, Spark Capital and Ambit Capital. The issue was opened on Monday evening.

During last year AGM the Bank obtained shareholders approval to raise upto Rs 350 crore. The fund raising was support Bank's business target of around 10% during the current fiscal and future Capital Adequacy Ratio (CAR).

Sources said that, the current round of fund raising will support Bank's growth for the next three years.

Bank's Tier-I capital is around 14.5% now. Quarter ended March 31, 2014 Basel II Capital CAR was at 15.11% as compared to 13.98% and Basel II it was 15.01%.

City Union Bank Limited (CUB) has reported a marginal increase in net profit to Rs 83.34 crore during the quarter ended March 31, 2014 as compared to Rs 82.47 crore, a year ago. Bank's total income rose to Rs 726.26 crore from Rs 677.98 crore, a year ago, an increase of around 7%.