ChrysCap picks 4% stake in City Union Bank

Private equity firm ChrysCapital has picked up 4.08 per cent stake in Tamil Nadu-based City Union Bank in what adds to its portfolio of private sector banks in the country. The PE firm has previously invested in banks such as ING Vysya Bank, Karur Vysya and Federal Bank.

ChrysCap picked the stake for Rs 139.7 crore ($23 million) through an open market transaction on Thursday, buying the shares from a Dutch development financial institution, which exited in the process.

Recently, the banking regulator Reserve Bank of India has also lifted the curb on FIIs’ purchase limit in the private bank.

“FIIs can now purchase up to 35 per cent of the paid-up capital of City Union Bank through primary market under the Portfolio Investment Scheme,” an RBI notification said. Last year in March FIIs were banned from buying more in the City Union Bank counter because it was close to breaching the 24 per cent ceiling.

FIIs held 21.54 per cent stake in the company as of March 31, 2014. The stock hit a 52-week high of Rs 64.85 a share on Thursday. City Union Bank’s stock closed at Rs 64.45, up 4.71 per cent on the BSE in a flat Mumbai market on Thursday.

Other notable investors of City Union Bank include a subsidiary of L&T Finance Holdings besides GKFF Ventures, an investment arm of the George Kaiser Family Foundation specialising in growth capital, middle market, early venture, mid venture, late venture, turnaround and buyout investments.

City Union Bank clocked a net profit of Rs 322 crore for the year ended March 31, 2013 with revenues of Rs 2188.7 crore. Almost half of the revenue and two-thirds of the profits was generated by its retail banking unit.

For the quarter ended December 31, 2013 it saw revenues rise around 16 per cent to Rs 646.13 crore and net profit increased 4.5 per cent to Rs 89.08 crore over the year-ago period.

(Edited by Joby Puthuparampil Johnson)

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