The shares of one of the largest government-owned banks gained up to 7 percent after the company’s board approved fundraising worth Rs 3,000 crore through Qualified Institutions Placement (QIP).
With a market capitalization of Rs 1.09 lakh crore, the shares of Union Bank of India were trading at Rs 148.15 per share, increasing around 5 percent as compared to the previous closing price of Rs 141.10 apiece.
According to the company filing, Union Bank of India’s board of directors approved the fundraising for an amount of Rs 3,000 crore by issuing equity shares capital through Qualified Institutions Placement (QIP) as well as a board-approved floor price of Rs 142.78 per equity share.
Furthermore, the bank has approved the opening of the Issue on February 20, 2024, and may give a discount of up to 5% on the Floor Price determined for the Issue.
Looking into the company’s performance, Union Bank of India’s revenue increased by 22 percent from Rs 20,966 Crore in Q3FY23 to Rs 25,521 Crore in Q3FY24. During the same period, net profit increased by 275 percent from Rs 2,264 crore to Rs 3,625 Crore.
The bank extended a credit facility to the Renewable Energy Sector till December 31, 2023, totaling Rs 25,256 crore, and sanctioned Rs 398 crore under Union Green Miles – Electric Vehicle.
As of FY22-23, The bank’s total deposits stood at Rs 11,17,716 crore, with CASA deposits accounting for 35.26%. The composition of deposits reveals that saving deposits reached Rs 3,20,075 crore, while current deposits stood at Rs 73,980 crore.
Union Bank’s asset quality remained robust, with gross NPA and net NPA ratios decreasing to 7.53 percent and 1.70 percent, respectively. The Provision Coverage Ratio (PCR) improved to 90.34% as of March 31, 2023, with a capital adequacy ratio of 16.04 percent.
The stock returned 61.27 percent in six months and 112.94 percent in a year. If an investor invests Rs 1 lakh in the firm, it will be worth Rs 2.12 lakh per year.
Union Bank of India is in the business of banking services, government business, merchant banking, agency business, insurance, mutual funds, and wealth management.
Written by:- Abhishek Singh
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