NEW DELHI, April 27: City Union Bank is coming out with a public issue at a premium of Rs 25 per share. The bank, with its headquarters in Kumbakonam, Tamil Nadu will be raising Rs 21 crore mainly to augment its long-term resources.The bank filed its draft offer document with the Securities and Exchange Board of India earlier this month. The issue is likely to hit the market on June 22.
City Union Bank, which has 100 branches, opened one more branch in Chennai. The bank will be opening one more branch in Vijayawada this week. As many as 43 branches, which account for 80 per cent of the business are computerised.
The bank had a deposit base of Rs 1021 crore and advances of Rs 600 crore as on March 31, 1998. It has projected a net profit of Rs 12 crore for the year. The bank has an equity base of Rs 18 crore, which will go up to Rs 24 crore post-issue.
The bank has no identifiable promoters. It has 10,962 shareholders. Integrated Enterprises is among the top ten shareholders. With a large number ofshareholders, sources say, the bank's shares were changing hands in informal trading at Rs 75 (pre-bonus).
The shares are proposed to be listed on the Madras, Mumbai and National stock exchanges.
Despite the dark clouds over the primary market, a number of bank issues got encouraging response, especially from retail investors in the past one year. The overwhelming response to these bank issues has been mainly due to the decent returns provided these banks on listing. The banks like Bank of Baroda, Corporation Bank, ICICI Bank, Bank of India, State Bank of Bikaner and Jaipur, State Bank of Travancore, Dena Bank and IndusInd Bank have managed to get over-subscription. In fact, Corporation Bank issue was oversubscribed by 10 times, ICICI Bank 6 times, SBBJ 4.1 times, etc.Some of the other bank issues in the pipeline are Punjab National Bank, The Jammu and Kashmir and State Bank of Hyderabad.
The Jammu and Kashmir Bank is coming out with its maiden public issue of Rs 70.3-crore at a premium of Rs 28 each.Lead managed by SBI Capital Markets, the issue opens on May 13, 1998 and closes on May 20. Like other banks, J&K Bank has also reserved 10,000 shares for its employees. Besides, 19 lakh shares each will be offered to banks and FIs and NRIs/OCBs. The bank announced an impressive performance for 1997-98 just before its public issue. J & K Bank posted a net profit of Rs 50 crore net profit against the previous fiscal figure of Rs 25 crore.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
