Union Bank shares in focus today as board approves raising up to Rs 5,000 crore via QIP

Shares of Union Bank of India Ltd are in focus today as the board of the lender approved raising of up to Rs 5,000 crore via qualified institutional placement (QIP). Floor price for the QIP has been fixed at Rs 91.10 per share.  The decision was taken by Union Bank's committee of directors for raising capital funds, which met on Monday. 

In the previous session (Monday), the Union Bank stock ended 2.81% lower at Rs 91.80 on BSE. The stock opened flat at Rs 94.46 on BSE. It hit an intraday low of Rs 91.50, falling 3.12% on BSE. Total 5.92 lakh shares of the bank changed hands amounting to a turnover of Rs 5.51 crore on BSE. Market cap of the bank fell to Rs 62,742 crore.    

In terms of technicals, the relative strength index (RSI) of the stock stands at 60, signaling the stock is neither oversold nor overbought. Union Bank has a one-year beta of 1.5, indicating high volatility during the period. Union Bank shares are trading higher than the 10 day, 20 day, 50 day, 100 day, 200 day moving averages.    

The committee "approved the opening of the issue today, i.e. August 21, 2023", and "approved the floor Price of Rs 91.10 per equity share", the exchange filing stated. 

The panel approved the raising of funds for an amount "not exceeding Rs 5,000 crore through issue of equity shares through qualified institutional placement subject to the requisite regulatory /statutory approvals", the state-run lender added. 

In another filing, Union Bank noted that the committee will meet again on August 24 to "consider and approve the issue price, including a discount, if any thereto" for the equity shares to be allotted to qualified institutional buyers, pursuant to the issue. 

In Q1 of the current fiscal, Union Bank logged a 107 percent on-year rise in its standalone net profit to Rs 3,236.44 crore. The lender’s net interest income climbed 16.59 percent on-year to Rs 8,840 crore. 

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The lender also reported an improvement in the asset quality, with gross non-performing asset (NPA) ratio rising 288 bps and net NPAs falling 173 bps compared to the year-ago period. 

 

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