Union Bank of India raises Rs 5,000 cr equity capital via Qualified Institutions Placement

The issue was opened on August 22 and received a 100% subscription, the bank said in a release.

The bank has allotted 57.77 crore shares at a price of Rs 86.55 per share (including a premium of Rs 76.55 per share) aggregating to Rs 5,000 crore representing a discount of 4.9945% to the floor price determined as per Regulatory guidelines.

On the successful capital raising, A Manimekhalai, Managing Director & CEO, said, “This demonstrates the continued faith of investors in the bank’s growth trajectory and prospects.”

Bank has received a significant & encouraging response from the market & seen participation by a diversified investor base which includes Banks, Asset Management Companies, Insurance companies and Foreign Portfolio Investors, according to the release.

The QIP Proceeds will augment the capital base and help us pursue growth opportunities as we endeavour to create value for the customers and shareholders, it added.

The overall allocation is a mix of 13 FPIs & 38 DIIs, mostly long-only investors, thereby also ensuring diversification of the shareholder base of Union Bank of India.

As of June 30, 2023, Bank’s CRAR & CET1 was 15.95% & 12.34% respectively.

Amount raised through this QIP issue will augment the bank’s Common Equity Tier I ratio & overall Capital Adequacy ratio, each by about 84 basis points.

As of June 30, 2023, the public shareholding in Union Bank of India stood at 16.51%. Consequent to the Equity capital raising, the public shareholding in the Bank increased to 23.01% and consequently, the government's shareholding stood at 76.99%.