Union Bank of India Board Approves ₹10,000 Cr Fundraising Plan

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Synopsis:

Union Bank of India plans to raise ₹10,000 crore, including ₹6,000 crore equity capital through public issues, rights issues, and private placements. Additionally, ₹2,000 crore each will be raised through Basel III compliant AT1 and Tier 2 bonds for growth and compliance.

Union Bank News Today

State-owned Union Bank of India has announced a significant move in its financial strategy, as its board of directors has given the green light to a plan aimed at raising funds aggregating to ₹10,000 crore.

Explore: UNION BANK OF INDIA

Equity Capital Expansion

The primary component of this fundraising plan involves raising equity capital up to ₹6,000 crore. This will be executed partially through various channels, including public issue (FPO), rights issue, private placements (including QIPs), preferential allotment, or a combination thereof to eligible institutions.

Bond Issuance

In addition to the equity capital, Union Bank of India intends to raise Basel III compliant Additional Tier-1 (AT-1) bonds and Tier-2 bonds, each up to ₹2,000 crore. This includes foreign currency denominated AT1/Tier-2 Bonds.

These bond issuances are crucial for bolstering the bank's capital structure and ensuring compliance with regulatory requirements.

Business Operations

As of March 31, 2024, the Government of India holds a substantial stake of 74.76% in the bank. The bank boasts an extensive network of 8,466 branches, including foreign branches, and 8,982 ATMs as of the same date.

Strategic Implications

This strategic decision by Union Bank of India's board underscores the bank's commitment to fortify its financial foundation, enhance growth prospects, and ensure compliance with regulatory norms.

The capital raised through this initiative will enable the bank to pursue its strategic objectives effectively amidst dynamic market conditions and evolving regulatory landscapes.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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