Union Bank of India jumps 6% on Rs 3,000 crore QIP; stock rises 111% in a year

Shares of Union Bank jumped 6 percent in early deals on February 21, a day after the PSU lender announced a Rs 3,000-crore qualified institutional placement (QIP) at a floor price of Rs 142.78 per share.

The floor price is at a marginal premium compared to the last closing price of Rs 141.10. The bank also announced the opening of the issue on February 20.

“We wish to inform you that the Committee of Directors for Raising Capital Funds (“Committee”) has at its meeting held today i.e. February 20, 2024, approved the raising of funds for an amount not exceeding Rs 3,000 crore through issue of equity shares through Qualified Institutions Placement subject to the requisite regulatory /statutory approvals,” the bank said in a stock exchange filing.

At 9:41 am, Union Bank shares were trading 4 percent higher at Rs 147.35 on NSE. The stock has delivered multibagger returns in the last one year, rising over 111 percent. In comparison, benchmark Nifty 50 has risen 24 percent during this period.

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For the quarter ended December 2023, Union Bank posted a 60 percent jump in net profit at Rs 3,590 crore on the back of lower provisioning and better interest income.

The total income of the bank increased to Rs 29,137 crore compared to Rs 24,154 crore a year ago. Its interest income improved to Rs 25,363 crore, as against Rs 20,883 crore a year ago.

The PSU bank recently entered the MSCI Global Standard index in its February 2024 quarterly review.

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