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Union Bank of India has received board approval to raise INR 20,000 crore through the issuance of long-term infrastructure bonds. The fund-raising initiative aims to support infrastructure development and affordable housing projects. Of this, the bank may target INR 7,500 crore through bonds with a 10-year tenor before the end of the current financial year. Additionally, the board approved the launch of green or sustainable bonds up to INR 5,000 crore. This move reflects the bank's focus on sustainable growth and development funding in key sectors.
Union Bank of India has decided to raise up to INR 20,000 crore by issuing infrastructure bonds to fund its infrastructure and affordable housing projects. The bank's Committee of Directors for Fund Raising (Non-Capital) approved the issuance of these long-term bonds in one or more tranches, in line with the board-approved plan. Advertisement
Within this framework, the bank is exploring options to raise INR 7,500 crore, which includes a base issue of INR 3,000 crore and a green shoe option of INR 4,500 crore. These bonds will have a tenor of 10 years and are expected to be issued before the end of the current financial year.
In addition, the board has approved the issuance of green bonds or sustainable bonds up to INR 5,000 crore in one or more tranches. These bonds will support environmentally sustainable and socially responsible projects, aligning with the bank's commitment to funding initiatives that promote sustainable growth.
Union Bank's decision follows a broader trend among state-owned banks in India to leverage bond markets to finance critical infrastructure and housing projects while also incorporating environmental, social, and governance (ESG) priorities. Past issuances of similar bonds by public sector banks have attracted strong investor interest, reflecting confidence in government-backed institutions and the growing focus on sustainable investment avenues.
Source PTI
FAQ
Q1: What is Union Bank of India planning to raise through bonds?
A1: Union Bank of India has received board approval to raise up to INR 20,000 crore through the issuance of long-term infrastructure bonds. The funds will be used to support infrastructure development and affordable housing projects.
Q2: How much will be raised in the current financial year?
A2: The bank may target INR 7,500 crore in bonds with a 10-year tenor before the end of the current financial year. This includes a base issue of INR 3,000 crore and a green shoe option of INR 4,500 crore.
Q3: What are green or sustainable bonds, and how much will be issued?
A3: The board has approved issuing green or sustainable bonds up to INR 5,000 crore. These bonds will fund environmentally sustainable and socially responsible projects, aligning with the bank's commitment to sustainable growth.
Q4: Why is the bank issuing these bonds now?
A4: The move reflects a broader trend among public sector banks in India to leverage bond markets for financing critical infrastructure and housing projects while incorporating environmental, social, and governance (ESG) priorities.
Q5: What investor response is expected for these bonds?
A5: Past issuances of similar bonds by state-owned banks have attracted strong investor interest, demonstrating confidence in government-backed institutions and growing demand for sustainable investment avenues.
Q6: How will this bond issuance support the bank's objectives?
A6: The funds raised will enable Union Bank to finance infrastructure and affordable housing initiatives, promote sustainable development, and strengthen its focus on ESG-compliant projects, contributing to long-term economic growth.
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