Union Bank of India, a leading public sector bank, has announced a strategic plan to raise ₹6,000 crore through a combination of equity and debt instruments. This decision, approved by the bank’s board, was revealed after market hours on a recent Wednesday. The move is part of the bank’s broader strategy to strengthen its financial position and support its growth initiatives.

The bank intends to raise up to Rs 3,000 crore through equity instruments, which may include a Further Public Offer (FPO), rights issue, or Qualified Institutional Placement (QIP). However, this equity raising is contingent upon shareholder approval, a critical step in the process. The remaining Rs 3,000 crore will be raised through debt instruments, specifically up to Rs 2,000 crore via Basel III-compliant Additional Tier 1 (AT1) bonds and up to Rs 1,000 crore through Tier 2 bonds.

Despite the announcement, Union Bank of India’s shares experienced a slight decline of 1.8%, closing at Rs 144.40 on the Bombay Stock Exchange (BSE). However, this dip did not overshadow the bank’s overall positive performance, as the stock has risen nearly 3% over the past month and over 21% in the last six months. Over a five-year period, the stock has surged by more than 327%, currently trading at a price-to-earnings (P/E) ratio of 6.76.

In a separate development, the bank disclosed that the Central government has canceled the appointment of Pankaj Dwivedi as Executive Director. Dwivedi, who was appointed to the role in March 2023 for a three-year term, has immediately ceased to hold the position. He has now returned to his previous role as General Manager at Punjab & Sind Bank. The bank informed the exchanges of this decision, stating, “We wish to inform you that the Central Government … has canceled the appointment of Pankaj Dwivedi as Executive Director of Union Bank of India and consequently he ceases to be the Executive Director of the Bank with immediate effect.”