City Union Bank rose 2.93% to Rs 59.75 at 10:12 IST on BSE after the Reserve Bank of India allowed foreign institutional investors to purchase up to 35% of the paid-up capital of the company.
Meanwhile, the BSE Sensex was up 113.33 points, or 0.50%, to 22,558.45.
On BSE, so far 82,000 shares were traded in the counter, compared with an average volume of 68,581 shares in the past one quarter.
The stock hit a high of Rs 60 so far during the day, which is also a 52-week high for the counter. The stock hit a low of Rs 58.90 so far during the day. The stock hit a 52-week low of Rs 37.95 on 4 September 2013.
The stock had outperformed the market over the past one month till 5 May 2014, rising 10.99% compared with the Sensex's 0.38% rise. The scrip had also outperformed the market in past one quarter, rising 19.44% as against Sensex's 10.78% rise.
The mid-cap private sector bank has an equity capital of Rs 54.27 crore. Face value per share is Re 1.
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The Reserve Bank of India (RBI) on Monday, 5 May 2014, notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 35% of the paid up capital of City Union Bank under the Portfolio Investment Scheme (PIS). City Union Bank has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs.
This approval is given subject to the condition that the onus of compliance with FDI policy and FEMA regulations including downstream investment would continue to remain on the Indian company, City Union Bank.
RBI is also advised that for FII/RFPI/QFI and NRI under Portfolio Investment Scheme, individual ceiling shall be 5% respectively and aggregate limit for all RFPI/FII/QFI shall be 35%.
City Union Bank will have to monitor individual limits of FII/FPI/QFI and NRI and also ensure that at no time its total foreign investment (direct as well as indirect) exceeds 49%, beyond which, it should seek prior FIPB approval, RBI said.
Further, RBI notified that the shareholding by FIIs, in City Union Bank have gone below the revised threshold limit stipulated under the extant Foreign Direct Investment (FDI) Policy. Hence, the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect.
FIIs held 21.54% stake in City Union Bank (as per the shareholding patterns as on 31 March 2013).
Net profit of City Union Bank rose 4.53% to Rs 89.08 crore on 14.4% rise in operating income to Rs 710.90 crore in Q3 December 2013 over Q3 December 2012.
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