Highlights of the Issue
· The QIP received an encouraging response from the market & saw participation bya diversified investor base,which includes Banks, Asset Management Companies, Insurance Companies and Foreign Portfolio Investors.
· Allotment of 22.11 crore shares at ₹ 135.65 per share (including premium of ₹ 125.65 per share) aggregating to ₹3,000 crore (Three Thousand Crore).
· The amount of capital raised through the QIP issue will augment the Bank’s Common Equity Tier I ratio & overall Capital Adequacy ratio.
Union Bank of India, one of the largest Public Sector Banks in India, has successfully raised equity capital of ₹ 3,000 crore via Qualified Institutions Placement (QIP) on February 26, 2024. The Issue was opened on February 20, 2024 and received strong interest from high quality Domestic and Foreign Portfolio Investors.Bank has allotted 22.11 crore Shares at price of ₹ 135.65 per share (including premium of ₹ 125.65 per share) aggregating to ₹ 3,000 crore representing a discount of approximately 5% to the floor price determined as per Regulatory guidelines.
Bank has received significant& encouraging response from the market & seen participation by a diversified investor base which includes Banks, Asset Management Companies, Insurance Companies and Foreign Portfolio Investors, thereby ensuring diversification of the shareholder base of Union Bank of India.
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. Bank has successfully raised ₹ 8,000 crore by way of QIPs during the year, which is the highest in the history of Union Bank of India and one of the highest in the history of Public Sector Banks in a financial year, in recent years.This demonstrates the continued faith of investors on the Bank’s growth trajectory and prospects.The QIP Proceeds will augment the Capital base and help us pursue growth opportunities as we endeavour to create value for our Customers & Shareholders”.
As on December 31, 2023, the public shareholding in Union Bank of India stood at 23.01%. Consequent to the equity capital raising, the public shareholding in the Bank increased to 25.24% and consequently, the shareholding of Government of India becomes74.76%.Bank has complied as per SEBI and Securities Contract (Regulations) Rules, 1957 (“SCRR”) & its further amendments i.e. to maintain a minimum public shareholding of at least 25.00%.
The Book Running Lead Managers (BRLMs) to the QIP issuewere IIFL Securities Ltd., J M Financial Ltd., IDBI Capital Markets & Securities Ltd., HDFC Bank Ltd. and BNP Paribas. The Legal advisors of the transaction were Luthra & Luthra Law Offices, Saraf & Partners and Duane Morris & Selvam LLP. The Statutory Auditors were N B S & Co., Chhajed & Doshi, G S Mathur & Co., P Chandrasekar LLP and M/s. V K Ladha & Associates.