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City Union Bank is planning to raise funds to support its growth plans and achieve total business of Rs 50,000 crore in three years.
The bank’s board met in Chennai on Friday to consider an enabling resolution for augmentation of capital through Qualified Institutional Placement (QIP) and informed the stock exchange that it resolved to raise up to Rs 350 crore inclusive of premium through the QIP route.
Later, CUB’s Managing Director, Dr N. Kamakodi, told Business Line that this enabling resolution was sought to support its CAGR (Compounded Annual Growth Rate) of 30 per cent. “We have the shareholders’ approval and this will be valid for a period of one year. We include fund infusion proposal through the QIP process in our agenda every year, get the shareholders nod, as this is valid for one full-year,” he added.
He further said that the bank had around Rs 1,200-Rs 1,500 crore of net-owned funds and another Rs 700 crore of retained funds. “We will need around Rs 1,000 crore and this can come by way of a rights issue and QIP or follow-on public offer.”
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