Union Bank of India has decided to raise up to ₹8,000 crore. With this fund raise, the Govt stake will be decreased in the Bank. Recently, Govt decreased 8% stake in Central Bank of India.
State-run Union Bank of India on Tuesday approved plans to raise up to Rs 8,000 crore through a mix of debt and equity instruments.
The bank said its board had approved raising debt capital of up to Rs 5,000 crore through Basel III-compliant Additional Tier-1 bonds and/or Tier-2 bonds. The board has also approved raising Rs 3,000 crore through equity issuance in phases within the overall Rs 8,000 crore limit.
What this means?
This means the bank will collect money from investors in two ways. Through debt instruments, the bank will borrow money by issuing bonds and will later repay the amount with interest.
Through equity instruments, the bank may issue new shares to investors, who will then become partial owners of the bank.
The funds raised will help the bank strengthen its capital base, meet RBI capital requirements, expand lending, and support future business growth.
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