Mumbai: In a strategic move to bolster its capital adequacy and support future growth, state-owned Union Bank of India has approved a capital raising plan of up to ₹6,000 crore, according to a regulatory filing submitted to the stock exchanges.
The decision was taken at the Board of Directors meeting held on 25th June 2025, and the capital will be raised through a mix of equity and debt instruments, subject to necessary approvals.
Breakdown of the Capital Plan
Equity Capital:
The bank plans to raise up to ₹3,000 crore via equity instruments in one or more tranches. The capital may be mobilized through various methods, including:
- Further Public Offer (FPO)
- Rights Issue
- Qualified Institutions Placement (QIP)
- Preferential Allotment
Private Placement
The proposal is subject to approval from the Government of India, regulatory authorities, and shareholders.
- Debt Instruments (Basel III Compliant Bonds):
- The remaining ₹3,000 crore will be raised via Basel III-compliant instruments, including:
- Additional Tier 1 (AT1) Bonds: Up to ₹2,000 crore
- Tier 2 Bonds: Up to ₹1,000 crore
These may include foreign currency-denominated bonds, offering the bank enhanced flexibility in sourcing capital.
Strategic Objectives
This capital infusion will help strengthen Union Bank’s capital base, support credit growth, and ensure continued compliance with Basel III norms. The move also aims to enhance the bank’s ability to meet regulatory capital requirements and expand lending operations, especially in key growth sectors.
