Union Bank of India (UBI) has announced its intention to raise ₹20,000 crore through the issuance of long-term infrastructure bonds, a strategic move aimed at financing a range of projects, particularly in the infrastructure and affordable housing sectors. This decision was formalized during a recent board meeting, where the committee of Directors for Fund Raising (Non-Capital) approved the issuance of these bonds in one or more tranches. The bank's regulatory filing indicates that this funding initiative aligns with its broader commitment to support essential development projects across the country.
The proposed bond issuance includes an initial base issue of ₹3,000 crore, with an additional green shoe option of ₹4,500 crore, allowing the bank to adjust the total amount based on demand and market conditions. UBI plans to raise ₹7,500 crore before the end of the financial year, with a tenor of 10 years for these long-term bonds. This approach not only aims to bolster the bank’s capital base but also to provide necessary funds for critical infrastructure projects that can drive economic growth and enhance living standards in urban and rural areas alike.
In addition to the infrastructure bonds, UBI's board has also approved the issuance of green bonds or sustainable bonds, with a total value of up to ₹5,000 crore. This move underscores the bank's commitment to sustainable finance, reflecting a growing trend among financial institutions to support environmentally friendly and socially responsible projects. By diversifying its funding avenues and prioritizing sustainable investments, UBI aims to position itself as a leader in the banking sector while contributing to the broader goals of sustainable development and affordable housing.
The issuance of these bonds is expected to attract a range of investors, including institutional and retail participants, interested in financing long-term projects that promise stable returns and contribute to societal well-being. As the demand for affordable housing and infrastructure development continues to rise, UBI's proactive approach in raising capital through infrastructure bonds will play a pivotal role in addressing these pressing needs. This initiative is part of a larger strategy by the bank to enhance its financial stability and support the government's vision of fostering economic growth through infrastructure investment.