City Union Bank soars on receiving RBI nod for hiking FII stake limit

City Union Bank is currently trading at Rs. 60.45, up by 2.40 points or 4.13% from its previous closing of Rs. 58.05 on the BSE. The scrip opened at Rs. 59.10 and has touched a high and low of Rs. 61.60 and Rs. 58.90 respectively. So far 200524 shares were traded on the counter. The BSE group 'B' stock of face value Rs. 1 has touched a 52 week high of Rs. 59.70 on 30-Apr-2014 and a 52 week low of Rs. 37.95 on 04-Sep-2013. Last one week high and low of the scrip stood at Rs. 59.70 and Rs. 57.80 respectively. The current market cap of the company is Rs. 3275.44 crore. The Institutions and Non-Institutions held 29.98% and 70.02% respectively. Reserve Bank of India (RBI) allowed foreign institutional investors to purchase up to 35% of the paid-up capital of the bank. The 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 Foreign Institutional Investors (FIIs). RBI has notified that FIIs, through primary market and stock exchanges, can now purchase up to 35% of the paid up capital of the bank under the Portfolio Investment Scheme (PIS). 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. It 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 & 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.  Further, the Reserve Bank notified that the foreign share holding by Foreign Institutional Investor (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 Hence, the restrictions placed on the purchase of shares of the bank were withdrawn with immediate effect.