City Union Bank Bonus 1:3 Approved, June 11 Last Day to Buy

City Union Bank announced a 1:3 bonus issue with June 12 as the record date. Investors must buy shares today to qualify due to SEBI’s T+1 settlement rule. The bonus uses Rs 25 crore from the bank’s securities premium account, which held over Rs 940 crore on March 31. This is the first bonus since 2018, signaling strong financial health and growth prospects.

How the Bonus Works and Eligibility

Eligible shareholders receive one free equity share for every three fully paid shares held on June 12. Only those with shares in their demat accounts by the record date qualify. Due to T+1 settlement, investors must purchase shares at least one trading day before the record date. This means June 11 is the final day to buy and ensure shares settle in time.

Why This Bonus Matters for Shareholders

Bonus shares increase the total number of outstanding shares but do not change market capitalisation. The move improves liquidity and affordability, allowing more investors to purchase shares. City Union Bank shares gained 2% over one week but fell 3% in one month. Meyka rates CUB.NS as B+ with a buy suggestion, reflecting neutral fundamentals with strong ROE and ROA scores.

Funding and Financial Position

The bank funds the bonus using Rs 25 crore from its securities premium account, which had a balance exceeding Rs 940 crore as of March 31, 2026. This demonstrates strong reserves and financial stability. The bonus issue shows confidence in future growth, as companies typically distribute free shares when they have strong earnings and capital reserves.

First Bonus in Eight Years

City Union Bank’s last bonus was a 1:10 issue in 2018. The eight-year gap reflects the bank’s conservative capital management. The 2026 bonus comes as the bank continues to expand its retail and wholesale banking operations. With Meyka’s B+ grade and neutral recommendation, the data points to a fairly valued stock with limited upside or downside risk.

Final Thoughts

City Union Bank’s 1:3 bonus issue on June 12 rewards long-term shareholders with free shares, though it does not change market value. With Meyka rating the stock B+ and analysts showing neutral sentiment, investors should act today to qualify but expect modest price movement post-bonus.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.