City Union Bank’s proposed rights issue to mobilise up to Rs 250 crore is likely to hit the market by the end of October or early November. The company has filed its Red Herring prospectus with the Securities and Exchange Board of India, and expects clearance from the market regulator by the second week of September.
“From then, it may take four to six weeks to complete other formalities and come out with the issue,” said the bank’s CEO and Managing Director, N. Kamakodi.
The decision to come out with the rights issue is to meet the capital-adequacy norms with ease.
The bank on Friday reported a 26.3 per cent growth in net profit at Rs 73.89 crore for the quarter ended June 30, 2012, against Rs 58.51 crore in the comparable previous year quarter. Total income for the quarter stood at Rs 567 crore, a growth of 36 per cent over the corresponding year-ago period.
Gross non-performing asset level was reduced from 1.22 per cent to 1.07 per cent during the quarter ended June 30, 2012, and the net NPA level from 0.51 per cent to 0.5 per cent.
The shares of the company closed at Rs 53.50 on the BSE.