State-run Union Bank of India has approved a proposal to raise capital of up to Rs 8,000 crore through a mix of equity and debt instruments aimed at supporting business growth and strengthening its capital base.
The PSU lender plans to raise up to Rs 3,000 crore through equity capital in one or more tranches via public issue, rights issue, private placement including qualified institutional placement (QIP), preferential allotment, or a combination of these routes, subject to approvals from the Government of India, shareholders, and other regulatory authorities.
In addition, the bank also approved raising up to Rs 5,000 crore through Basel III-compliant Additional Tier-1 (AT1) bonds or Tier-2 bonds, including foreign currency-denominated issuances, within the overall Rs 8,000-crore fundraising limit.
The proposed capital raising is expected to provide the lender with greater financial flexibility to support credit expansion while maintaining regulatory capital requirements.
The announcement was made by the bank in its filing to the exchanges during market hours. The stock today settled 0.78% or Rs 1.31 lower at Rs 167.56
on the NSE.
With one-year returns of 19%, Union Bank shares have been market outperformers. Headline indices Nifty and the BSE Sensex have fallen nearly 4% and 7%, respectively, in the same period.
While the stock is currently trading above its 200-day simple moving average (SMA) of Rs 159, it has slipped below its 50-day SMA of Rs 174, according to Trendlyne data.
The stock has been quite volatile, with on-year beta at 1.5, according to Trendlyne.
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