Union Bank of India shares plunged 6% today; here's why

Shares of Union Bank of India slumped 6.18 per cent on Tuesday to hit a low of Rs 118.35. The stock tumbled after the state-owned lender faced scrutiny for a book purchase of Rs 7.25 crore. Bourses BSE and NSE have sought clarification from the PSU bank over the same.

"The Exchange has sought clarification from Union Bank of India on May 6, 2025, with reference to news dated May 06, 2025, quoting 'Union Bank faces heat over Rs 7.25 crore book purchase'. The reply is awaited," a BSE filing stated.

The bank allegedly decided to purchase nearly 2 lakh copies at a massive cost of Rs 7.25 crore to distribute among its customers, local schools, colleges, libraries etc. According to the report, Union Bank placed the order ahead of the publication of former chief economic adviser (CEA) Krishnamurthy V Subramanian's 'India@100: Envisioning Tomorrow's Economic Powerhouse'.

This report comes after the government prematurely terminated his tenure last week. As per the news report, one of the reasons for Subramanian's exit is alleged improprieties around the promotion of his book.

Union Bank managing director and chief executive A Manimekhalai suspended Girija Mishra, who was overseeing the support services department. Manimekhalai informed the board that she had asked Mishra to make the purchase but not to break any rules. Executive director Nitesh Ranjan, who oversees marketing and publicity, said he was not informed of the 50 per cent advance to publishers Rupa Publications.

Around 3.51 lakh Union Bank shares changed hands on BSE today. The figure was slightly lower than the two-week average volume of 3.67 lakh shares. Turnover on the counter came at Rs 4.24 crore, commanding a market capitalisation (m-cap) of Rs 90,343.72 crore.

Technically, the scrip traded lower than the 5-day, 10-, 20-, 30-, 50-day and 200-day simple moving averages (SMAs) but lower than the 100-day and 150-day SMAs. Its 14-day relative strength index (RSI) came at 42.06. A level below 30 is defined as oversold while a value above 70 is considered overbought.

It has a price-to-earnings (P/E) ratio of 5.54 against a price-to-book (P/B) value of 0.84. Earnings per share (EPS) stood at 21.37 with a return on equity (RoE) of 15.24. According to Trendlyne data, Union Bank has a one-year beta of 1.7, indicating high volatility.

As of March 2025, the government held a 74.76 per cent stake in the PSU lender.