City Union Bank (CUB) Gains 3.38% at Midday as Board Approves Rs 500-Cr QIP, Sets AGM Date, Dividend Record Date

Mumbai, June 24: City Union Bank (CUB) shares rose over 3% in afternoon trading on Wednesday, reacting positively to board approvals announced through an exchange filing on Tuesday after market hours. Selling ceased abruptly after hitting a low of Rs 197.05 at 9.13 am, with buyers steadily reclaiming lost ground for the remainder of the session. Wednesday’ session high of Rs 205.20 came close to matching the year’ high of Rs 205.35 reached on June 15.

Volume-wise, buy volume (49.48%) and sell volume (50.52%) were closely matched at the time of writing.

Weekly Trend

On a weekly basis, CUB was trading around Rs 201 on June 17, which declined to its weekly low of around Rs 196 on June 19. Prices rebounded to around Rs 197 for the next couple of sessions on June 22 and June 23. If the price holds above Rs 205 at close on Wednesday, it would mark a decisive break from last week’ sell-off and rise to its highest level in over a week. Initial weakness below its previous close gave way to bullishness as prices found support around the Rs 196 mark and climbed to over 3% gains by mid-day.

QIP Approval: Board Clears Rs 500 Crore Capital Raise

The City Union Bank board has approved a qualified institutional placement (QIP) of up to Rs 500 crore, through which the bank plans to raise fresh capital from institutional investors. Discount to face value (issue price to be paid by QIP investors), and the size of the final QIP (up to Rs 500 crore), will provide further cues on demand from institutions. City Union Bank is one of the oldest mid-sized private banks with a dominant footprint in Tamil Nadu and neighbouring states. The bank has had a conservative lending culture with healthy asset quality over the years, becoming investor favourites due to its regional dominance.

The board also fixed August 14 as the date for the Annual General Meeting and July 31 as the record date for the dividend, providing shareholders with near-term income visibility. The dividend record date announcement is likely to have added a separate layer of buying interest on Wednesday, as income-focused investors positioned ahead of the eligibility cutoff. Together, the three disclosures, the QIP, the AGM date, and the dividend record date, delivered a concentrated set of positive signals that the market wasted little time in pricing in.

Source:

• NSE India, City Union Bank BSE/NSE regulatory filing