Karur Bank follows GMR route, defers QIP plan

Written by Sajan C Kumar | chennai | Updated: Jul 30 2009, 03:36am hrs
Following the footsteps of GMR Infrastructure, which withdrew its plans to raise finance through qualified institutional placements (QIPs), the Tamil Nadu-based Karur Vysya Bank (KVB) has decided to defer its QIP for Rs 500 crore for now. The annual general meeting (AGM) of the bank, which was called on Monday to ratify the board of directors approval to go in for a QIP, did not consider the issue. Instead, the bank has said in filing to BSE that the board has taken a decision to defer the issue for now and hence the same was dropped from the listed agenda item.

Though the GMR Infra withdrew the QIP plans blaming unfavourable market conditions, no reason was officially stated in the communication by the bank to stock exchanges. However, bank source close to the development told FE that poor market conditions could be one of the reasons for the deferment of the QIP issue. It is also learnt that financial institutions toned down appetite towards QIPs have made the KVB management to rethink about the timing of the issue. Some of the financial institutions even have passed resolutions to the effect that they will not take up any fresh QIPs and this might be another reason for the management to differ the issue, said the source.

Meanwhile, the bank has posted a 130.35% jump in its net profit to Rs 70.35 crore in the first quarter as against Rs 30.54 crore for the corresponding quarter last year. The operating profit rose to Rs 99.17 crore from Rs 79.95 crore, posting a growth of of 24%. Total income increased to Rs 487.37 crore from Rs 376.40 crore, registering a rise of 29.48%. Total interest income went up to Rs 406.90 crore from Rs 336.18 crore, posting a growth of 21.40%. Interest on advances recorded a growth of 25.54% to Rs 318.78 crore from Rs 253.93 crore.