Union bank

Union Bank of India plans to raise Rs 1,500 crore through AT1 bond


Union Bank of India is seeking to raise up to Rs 1,500 crore of capital through Tier I bonds and another Rs 1,100 crore through Indian Renewable Energy Development Agency (IREDA) through bonds in the medium term in the coming week.

Debt market sources said that Union Bank has indicated that its AT bond offering will have an issue size of Rs 500 crore with a green shoe option of Rs 1,000 crore.



CRISIL Ratings assigned “AA/stable” to Union Bank Tier I bonds. The overall ratings continue to reflect the expectation of strong support from the majority shareholder, the Government of India (GoI) and the considerable scale of the bank’s operations. These strengths are partially offset by modest asset quality and a modest, albeit improving, earnings profile.

The bank had a capital adequacy ratio of 13.92% with a level I of 11.75% at the end of December 2021.

As for IREDA, India Ratings has assigned an “AA+” rating to its borrowing program for the current financial year.

The ratings continue to reflect the systemic importance of IREDA to the Government of India given the need to address issues related to renewable energy (RE) project financing.

IREDA’s capital adequacy ratio remained above the regulatory benchmark (by 13%) at 17.12% in FY21. IREDA needs increased capital injections to improve its capital cushion necessary for growth and better provisioning.

IREDA’s leverage (debt/equity) decreased by 8.01x in FY21, compared to 8.67x in FY20, thanks to an increase in equity after having recorded strong profits.

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor