Union Bank of India starts roadshows abroad for Rs2,000-crore QIP
Mumbai: Union Bank of India has started road shows for its Rs2,000 crore qualified institutional placement (QIP), said two people close to the development, on the condition of anonymity.
The public sector bank will be raising funds in the first week of December.
“The road shows will be done in Singapore, Hong Kong, London and New York beginning Monday,” said the first person cited above.
Rajkiran Rai G., chief executive and managing director at Union Bank, declined to comment.
The funds raised will help the lender to boost its capital adequacy. As on 30 September, the capital adequacy ratio of Union Bank of India stood at 11.22%. The firm posted a loss of Rs1,531 crore during the second quarter of the current fiscal as against a net profit of Rs117 crore during the corresponding period last fiscal, due to front-loading of provisions.
Several public sector banks are accessing the equity markets to raise funds as investor sentiment remains positive. On 6 November, Moody’s Investors Service revised credit outlook for Union Bank of India from negative to stable, citing the recapitalization programme announced by the government and improved capital buffer.
The bank has hired Edelweiss Financial Services Ltd and Jefferies as investment bankers to handle the share sale.
The rating agency also upgraded India’s sovereign bond rating to Baa2 from Baa3 with a stable outlook last week further boosting investor interest.
During the current fiscal year, State Bank of India raised Rs15,000 crore in June through QIP, the biggest so far by any bank. In August, Vijaya Bank raised Rs700 crore through the QIP route. According to a PTI report dated 6 November, Punjab National Bank plans to raise about Rs5,000 crore as well.
On Monday, shares of Union Bank of India rose 0.12% to Rs170.60, while the exchange’s benchmark Sensex gained 0.05% at 33,359.90 points.
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