Union Bank of India has announced a strategic capital-raising plan worth ₹6,000 crore, combining both equity and debt instruments, to strengthen its balance sheet and support future expansion. The decision was approved during the bank’s board meeting held on June 25, 2025.
Capital Structure Breakdown
According to the exchange filing, the public sector lender will raise:
- Up to ₹3,000 crore via equity capital, through one or more of the following:
- Further Public Offer (FPO)
- Rights Issue
- Qualified Institutions Placement (QIP)
- Preferential Allotment
These will be executed in tranches, subject to shareholder and regulatory approvals.
- Up to ₹3,000 crore via debt instruments, including:
- ₹2,000 crore through Basel III-compliant Additional Tier 1 (AT1) bonds
- ₹1,000 crore through Tier 2 bonds, potentially in foreign currency.
Strengthening Capital Base and Market Confidence
The move aligns with Union Bank’s broader strategy to enhance its capital adequacy, meet regulatory requirements, and fund growth initiatives. The bank’s shares closed at ₹144.40 on June 25, down 1.8%, but have gained over 21% in the past six months and 327% over five years, reflecting strong investor confidence.
Financial Snapshot
In Q4 FY25, Union Bank reported a 51% year-on-year jump in net profit to ₹4,984.9 crore, with net interest income rising to ₹9,514 crore. The robust performance underscores the bank’s improving fundamentals and operational efficiency.
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