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Union Bank of India (UBoI) plans to raise ₹2,000 crore by issuing additional equity shares via the qualified institutional placement (QIP) route in the next few months.
This issuance is not only to comply with SEBI’s minimum public shareholding (MPS) norms but also to support loan growth, said A Manimekhalai, MD & CEO.
The capital markets regulator’s Securities Contracts (Regulation) Rules stipulate that every listed company should maintain a public shareholding of at least 25 per cent.
The public sector bank had issued an additional 57.77 crore equity shares of face value Rs 10 each at issue price of ₹86.55 under QlP on August 25, 2023 and raised ₹5,000 crore.
Accordingly, the Government’s shareholding in the Bank came down to 76.99 per cent as compared to 83.49 per cent as on June 30, 2023.
The ₹2,000 crore QIP issuance, which is in the works, will bring down the Government’s shareholding in the Bank to below 75 per cent, Manimekhalai said.
The Bank also has plans to raise about ₹3,000 crore via AT-I and Tier-II bond issuances by March-end 2024.
The Union Bank chief said her Bank had a corporate loan sanctions pipeline of about ₹34,000 crore.
She emphasised that the Bank has adequate liquidity to support 10-12 per cent loan growth in FY24. It has excess statutory liquidity ratio (Government and State Government) securities holding about ₹55,000 crore.
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