Union Bank of India successfully raised ₹ 5,000 Crore Equity Capital via Qualified Institutions Placement (QIP)

 Union Bank of India successfully raised ₹ 5,000 Crore Equity Capital via Qualified Institutions Placement (QIP)  

 

Highlights of the Issue

 

      Allotment of 57.77 crore shares at ₹ 86.55 per share (including premium of ₹ 76.55 per share) aggregating to ₹ 5,000 crore (Five Thousand Crore).

      The QIP received encouraging response from the market & seen participation by diversified investor base which includes Banks, Asset Management Companies, Insurance companies and Foreign Institutional Investors.

      The QIP has been subscribed by 51 investors, mostly long-only investors, which include 13 FPIs & 38 DIIs.

      Considering financials for June 2023, amount of capital raised through QIP issue will augment Bank’s Common Equity Tier I ratio & overall Capital Adequacy ratio, each by about 84 basis points.

 

Union Bank of India, 5th largest Public Sector Bank in India, has successfully raised equity capital of ₹ 5000 Crore via Qualified Institutions Placement (QIP) on August 25, 2023.  The Issue was opened on August 22, 2023 and received 100% Subscription.  Bank has allotted 57.77 crore Shares at price of ₹ 86.55 per share (including premium of ₹ 76.55 per share) aggregating to ₹ 5,000 crore representing a discount of 4.9945% to the floor price determined as per Regulatory guidelines.

 

On the Successful capital raising, Ms. A Manimekhalai, MD & CEO, says “We are delighted to conclude one of the largest equity capital raising issue in public sector banking space in the recent past. This demonstrates the continued faith of investors on the Bank’s growth trajectory and prospects. Bank has received significant & encouraging response from the market & seen participation by diversified investor base which include Banks, Asset Management Companies, Insurance companies and Foreign Portfolio Investors. The QIP Proceeds will augment the Capital base and help us pursue growth opportunities as we endeavour to create value for the Customers & Shareholders”.

 

The overall allocation is a mix of 13 FPIs & 38 DIIs, mostly long only investors, thereby also ensuring diversification of the shareholder base of Union Bank of India.

 

As at June 30, 2023, Bank’s CRAR & CET1 was 15.95% & 12.34% respectively. Amount raised through this QIP issue will augment Bank’s Common Equity Tier I ratio & overall Capital Adequacy ratio, each by about 84 basis points.

 

As on June 30, 2023, the Public shareholding in Union Bank of India stood at 16.51%. Consequent to the Equity capital raising, the public shareholding in the Bank increased to 23.01% and consequently, Shareholding of Government of India becomes 76.99%.

 

IIFL Securities Ltd, J M Financial Ltd., Nuvama Wealth Management Limited (formerly Edelweiss Financial Services Ltd.), Yes Securities (India) Ltd., ICICI Securities Ltd. and BNP Paribas were the Merchant Bankers and Book Running Lead Managers (BRLMs) to the QIP issue. The Legal advisors of the transaction were M/s. Crawford Bayley & Co and M/s Saraf & Partners. The Statutory Auditors were M/s R G N Price & Co., M/s Sarda & Pareek LLP, M/s NBS & Co., M/s C R Sagdeo & Co, M/s PVAR & Associates, M/s Gopal Sharma & Co.