Union Bank to raise ₹3,000 Crore through QIP at ₹142.78 per share

21 Feb 2024 , 11:57 AM

A qualified institutional placement (QIP) worth ₹3,000 Crore was announced by PSU lender Union Bank of India on Tuesday, with a floor price of ₹142.78 per share.

‘We wish to inform you that the Committee of Directors for Raising Capital Funds (“Committee”) has at its meeting held today i.e. February 20, 2024 approved the raising of funds for an amount not exceeding ₹3,000 Crore through issue of equity shares through Qualified Institutions Placement subject to the requisite regulatory /statutory approvals,’ stated the bank in a filing with the stock exchange.

In comparison to the Union Bank of India’s scrip’s closing price of ₹141.2 on the BSE on Tuesday, the floor price is at a slight premium. Additionally, the bank declared that the issue would open on February 20. 

Union Bank of India’s scrip has a 52-week high of ₹155.35 and a 52-week low of ₹60.35.

Due to lesser provisioning and higher interest revenue, Union Bank of India reported a 60% increase in net profit for the December quarter, coming in at ₹3,590 Crore. In the same period last year, the bank made a net profit of ₹2,249 Crore, according to a regulatory filing from Union Bank of India.

In the third quarter of the current fiscal year, the bank’s overall income climbed to ₹29,137 Crore from ₹24,154 Crore the previous year. Compared to ₹20,883 Crore a year earlier, the bank’s interest income increased to ₹25,363 Crore during the third quarter of the current fiscal year. 

As of December 31, 2023, the bank’s gross non-performing asset (NPA) ratio decreased to 4.83% from 7.93% the previous year.

In a similar vein, at the end of December 2022, the net NPA had decreased to 1.08% from 2.14%.

The bank reported that during the quarter under review, provisioning for bad loans decreased to ₹1,226 Crore from ₹2,443 Crore during the same time last year. 

The PSU bank was just included to the MSCI Global Standard index in the quarterly review for February 2024. In the three months prior, the bank had increased by 21% to be included in the list.

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