Key facts
- City Union Bank shares experienced a price adjustment of approximately 23% due to a 1:3 bonus issue.
- The stock opened at Rs 197.40, appearing lower than the previous day's close of Rs 256.80.
- After accounting for the bonus shares, the stock price actually increased by over 2% to Rs 202.10.
- The bonus shares will be issued using approximately Rs 25 crore from the bank's securities premium account.
- June 12 was the record date for determining shareholder eligibility for the bonus shares.
- This marks the first bonus issue by City Union Bank in eight years.
City Union Bank shares experienced a significant apparent price drop of approximately 23% on Friday following the adjustment for its 1:3 bonus issue. The stock opened at Rs 197.40, down from Thursday's closing price of Rs 256.80, a decline attributed solely to the bonus share adjustment rather than a loss in shareholder value.
After accounting for the bonus shares, the stock actually traded higher, gaining over 2% to Rs 202.10. The bank had announced the 1:3 bonus issue in April, with June 12 designated as the record date for shareholders eligible to receive one new equity share for every three held. This marks the bank's first bonus issue in eight years, with the previous one being a 1:10 ratio in 2018.
Bonus shares are distributed from a company's reserves and do not alter its market capitalization, though they can improve share liquidity and affordability. City Union Bank plans to issue these bonus shares using approximately Rs 25 crore from its securities premium account, which held over Rs 940 crore as of March 31, 2026. The bank recently reported a 25% year-on-year increase in net profit for the fourth quarter of FY26, reaching Rs 359.56 crore, with net interest income rising by 31% to Rs 785.83 crore.