Private sector lender City Union Bank is planning to raise Rs 258 crore through sale of shares to investors on rights basis as well as issue of equity to its employees.
The bank said it would issue a total of 12.89 crore equity shares including 10.24 crore shares under the rights basis and the remaining 2.65 crore shares would be reserved for employees, according to letter of offer filed by the bank with market regulator Sebi showed.
"The issue comprises of issue of 10.24 crore equity shares to the equity shareholders of our banks on rights basis in the ratio of one equity share for every four equity shares...Aggregating upto Rs 204.98 crore and a reservation of upto 2.65 equity shares for the eligible employees of the bank aggregating upto Rs 53 crore," it added.
The proceeds of the issue would be used to strengthen the bank's capital base to support future growth.
City Union Bank had last month announced that its Board of directors has fixed the issue price for its proposed rights issue at Rs 20 per share. The issue would open on December 17 and close on December 31.
Edelweiss Financial Services is acting as lead manager to the issue, while Karvy Computershare is the registrar.
For the half-year this fiscal (April-September), the net profit of the bank rose to Rs 136.03 crore, from Rs 105.95 crore in the same period of 2010-11.
The total income grew to Rs 877.26 crore in April- September period of the current fiscal as against Rs 635.42 crore recorded during the same period of previous year.
Shares of the bank today closed at Rs 55.90, after touching a new high of Rs 62.40 intra-day on BSE.
