Union Bank shares gain on board approval to raise Rs 5,000 crore through QIP

The bank said that its Committee of Directors for Raising Capital Funds would meet on August 24. The committee will meet to discuss and approve the issue price as well as the potential discount.

Union Bank also added that it may choose to offer a 5 per cent discount on the floor price for its equity shares.

Union Bank of India has announced that it is looking to raise fresh funds to the tune of Rs 5,000 crore via the sale of equity through Qualified Institutional Placement (QIP). The bank has set the floor price at Rs 91.10 per share. Union Bank also added that it may choose to offer a 5 per cent discount on the floor price for its equity shares.

Following the announcement shares of Union Bank gained more than 1 per cent to hit a high of Rs 93.20 apiece in morning trade on Tuesday on BSE. However, the bank stock pared its early gains and was trading at Rs 91.31 apiece, down 0.53 per cent, on BSE at 12:49 PM.

“The Committee of Directors on for Raising Capital Funds has at its meeting held today i.e. August 21, 2023, inter alia approved the raising of funds for an amount not exceeding Rs 5,000 crore through issue of equity shares through QIP subject to the requisite regulatory /statutory approvals, as applicable," the lender stated in a filing to the stock exchanges on Monday.

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Issue price approval on August 24

The bank added that its Committee of Directors for Raising Capital Funds would meet on August 24. The committee will meet to discuss and approve the issue price as well as the potential discount.

The bank’s shares are trading close to its 52-week high of Rs 96.80, which was achieved on August 18. The shares of the bank have dipped around 1 per cent over the past week and have traded nearly flat over the past month-long period. However, the bank has managed to generate over 127 per cent in returns over the past year-long period. The share price has seen an increase of 11.73 per cent year-to-date.

The public sector lender recently reported revenue of Rs 27,822 crore for the June quarter of FY24, marking a marginal increase quarter-on-quarter. The bank’s Profit after tax more than doubled year-on-year to Rs 3,272 crore in Q1FY24. Sequentially profit grew 16 per cent compared to March 2023 quarter.

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