Union Bank of India has informed the Exchange regarding Capital Plan of the Bank at its Board meeting held on June 25, 2025.
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Union Bank of India's Board, at its meeting on June 25, 2025, approved a Capital Plan to raise up to ₹6,000 crore in total. The plan includes raising up to ₹3,000 crore of equity capital through a Further Public Offer (FPO), Rights Issue, Private Placements including Qualified Institutions Placements (QIPs), Preferential Allotment, or a combination of these methods. Additionally, the bank plans to raise up to ₹2,000 crore through Basel III-compliant Additional Tier 1 (AT1) Bonds and up to ₹1,000 crore through Basel III-compliant Tier 2 Bonds, which may include foreign currency-denominated instruments. The entire plan is subject to approvals from the Government of India, other regulatory authorities, and the bank's shareholders.
This capital raise may lead to dilution for existing equity shareholders depending on the mode and pricing of the eventual issuance. Bond issuances (AT1 and Tier 2) will strengthen the bank's capital adequacy ratio but add to its interest obligations. Near-term stock reaction will depend on the pricing and structure of the eventual issuances.