City Union Bank share price: Shares of City Union Bank appeared to have plunged over 23% on Friday, 12 June, on BSE. However, this fall was because the banking stock turned ex-bonus today following the implementation of the lender’s 1:3 bonus issue. This resulted in the stock price appearing significantly lower.
While the stock seemed to have fallen sharply at the opening bell, the decline was purely a technical adjustment related to the bonus issue and did not indicate any destruction of shareholder wealth.
The stock opened at ₹197.40 apiece on the NSE, substantially below its previous closing price of ₹256.80. At first glance, the nearly 23% drop could have appeared alarming to investors. However, the adjustment reflected the impact of the bonus shares being factored into the stock price.
In fact, after accounting for the bonus adjustment, City Union Bank shares have actually gained 8% to its day’s high of ₹208.50 post adjustment, indicating positive investor sentiment towards the stock.
The development has drawn attention from market participants as bonus issues often create confusion among retail investors who may mistake the adjusted share price for an actual market decline.
City Union Bank’s 1:3 bonus issue details
City Union Bank had announced a 1:3 bonus issue in April. Under this arrangement, shareholders will receive one additional equity share for every three fully paid-up equity shares held in their demat accounts as of the record date.
To facilitate the issue, the bank will utilise nearly ₹25 crore from its securities premium account. As of March 31, 2026, the securities premium account had a balance exceeding ₹940 crore. Subsequently, in May, the lender fixed June 12 as the record date for determining shareholder eligibility for the bonus shares.
The latest issue is significant because it marks the bank’s first bonus issue in eight years. The previous bonus issue was announced in 2018, when the lender issued shares in the ratio of 1:10.
A bonus issue involves the distribution of additional shares to existing shareholders at no extra cost by capitalising a company’s reserves. While investors receive more shares, the overall value of their holdings remains unchanged because the share price is adjusted proportionately.
Although a bonus issue does not alter a company’s market capitalisation, it often improves liquidity in the stock and makes shares more affordable for retail investors by lowering the market price per share. Increased affordability can potentially broaden investor participation and improve trading activity.
City Union Bank stock performance
City Union Bank shares have delivered a mixed performance in recent times. The banking stock has gained more than 9% over the past week and nearly 10% in the last month, reflecting strong recent momentum.
However, on a year-to-date basis, the stock remains down more than 7% in 2026. Looking at the longer-term picture, the lender has generated substantial returns for shareholders, rising 37% over the past year, 115% over three years and 58% over five years.
City Union Bank Q4
The bank’s recent financial performance has also remained robust. For the fourth quarter of FY26, City Union Bank reported a net profit of ₹359.56 crore, registering a 25% year-on-year increase from ₹287.96 crore reported in the corresponding quarter of the previous financial year.
Its net interest income (NII), a key indicator of banking profitability, rose approximately 31% year-on-year to ₹785.83 crore during the quarter under review.
With improving earnings, a stronger profitability profile and the implementation of its first bonus issue in eight years, City Union Bank remains in focus among investors looking at the private banking space.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
