Karur Vysya Bank to raise foreign equity holding cap

Karur Vysya Bank (KVB) may increase the ceiling of holding by foreign institutional investors (FIIs), non-resident Indians (NRIs) and foreign direct investments in the equity share capital of the bank from 24 per cent to 35 per cent.

Recently, the bank had got the Foreign Investment Promotion Board’s (FIPB’s) approval to issue shares, worth Rs107.50 crore to foreign investors.

According to a senior official, the bank is planning to raise 25 per cent of the proposed rights issue, worth Rs450 crore, from foreign investors.

KVB has sought its shareholders’ approval to authorise the board of directors to permit foreign investors to purchase or acquire up to 35 per cent of the paid-up capital of the bank. The present foreign holding, that is, the shares held by NRIs and FIIs, is 23.3 per cent. Hitherto, NRIs and FIIs could jointly hold only up to 24 per cent of the paid-up share of the bank.

P T Kuppuswamy, managing director and CEO, had earlier said KVB was planning to raise Rs450 crore in two tranches before May.

Of the total issue, 25 per cent will be issued to FIIs, for which the bank had got the approval from FIPB in January.

Besides, the bank also lined up plans to raise money, to increase its net-owned funds by another Rs1,900 crore by 2016, which will be the centenary year for the bank.

The proposed fundraising plans are to support the bank’s business target of Rs1.25 lakh crore.