Union Bank of India's board of directors approved a comprehensive capital-raising plan on May 26, 2026, as reported by Zee News. The public sector lender announced in a regulatory filing to the BSE that its board considered and approved the bank's capital plan to raise capital by an amount not exceeding ₹8,000 crore. This strategic move aims to strengthen the bank's capital base and support future business growth initiatives. The proposed issue is now subject to approvals from the Government of India, regulatory authorities, and shareholders of the bank.
According to the regulatory filing, the bank will raise up to ₹5,000 crore through Basel III-compliant additional Tier 1 bonds and/or Tier 2 bonds. As reported by Zee News, this component includes foreign currency denominated AT1/Tier 2 bonds within the overall limit of ₹8,000 crore. The bank stated in its official exchange filing that "Raising of Basel III compliant Additional Tier 1 Bonds and/or Tier 2 not exceeding ₹5,000 Crore, (including foreign currency denominated AT1/Tier 2 Bonds) within the overall limit of ₹8,000 Crore." Banks usually issue Basel III bonds to increase their capital reserves, improve financial strength, and support future loan growth.
The bank has approved raising up to ₹3,000 crore through equity capital in one or more tranches, as detailed in the regulatory filing. According to Zee News, the equity fundraising may be carried out through multiple channels including a further public offer (FPO), rights issue, private placement, qualified institutional placement (QIP), and/or preferential allotment. The bank emphasized that this equity component falls within the overall ₹8,000 crore capital raising limit, with the board specifically approving raising ₹3,000 crore equity capital in tranches within the overall limit. The fundraising could take place through multiple routes including a Further Public Offer (FPO), Rights Issue, Qualified Institutional Placement (QIP), preferential allotment, private placement, or a combination of these methods.
Union Bank of India shares were trading at ₹167.22, down 0.98% for the day at the time of writing, as reported by Zee News. Despite the mild decline in today's session, the banking stock has delivered strong returns in recent trading sessions, rising over 6.72% in the past five days. So far this year, Union Bank stock has gained nearly 8.76%, outperforming several PSU banking peers. The capital infusion is expected to help the bank improve its capital adequacy position and support loan growth amid rising credit demand in the banking sector.
