Union Bank of India plans to raise up to ₹8,000 crore through fresh equity and debt. The bank also recommended a dividend of ₹5 per share. The AGM will appoint a new MD & CEO.

Union Bank of India to Raise Up to ₹8,000 Crore, Proposes ₹5 Dividend

Union Bank of India aims to raise up to ₹8,000 crore and has recommended a dividend of ₹5 per equity share.

Reader Takeaway: Capital raise signals growth plans; dividend offers direct shareholder return.

What just happened

Union Bank of India announced its intention to raise capital up to ₹8,000 crore through fresh equity shares and/or Additional Tier-1/Tier-2 Capital compliant with Basel III guidelines. This move is aimed at supporting business expansion, regulatory compliance, and general lending activities. The bank also recommended a dividend of ₹5 per equity share for the financial year 2025-26, subject to shareholder approval.

Why this matters

The proposed capital infusion signals the bank's strategic intent for growth and strengthening its financial base. The dividend payout offers a direct return to shareholders. Key leadership appointments, including a new MD & CEO, indicate significant changes in the bank's management structure.

The backstory

As of March 31, 2026, Union Bank of India had an authorised capital of ₹10,000 crore and paid-up equity share capital of ₹7,633.60 crore. The Government of India held a 74.76% stake. The bank maintained strong capital adequacy ratios under Basel III, with CRAR at 18.02% for both March 31, 2026, and March 31, 2025.

What changes now

The capital raise proposal needs shareholder approval at the upcoming Annual General Meeting (AGM) scheduled for July 10, 2026. The AGM will also vote on the appointment of Shri Asheesh Pandey as the new MD & CEO, alongside the reappointment of existing Executive Directors and the appointment of a Government Nominee Director. The share transfer books will be closed from July 4, 2026, to July 10, 2026, for dividend eligibility.

Risks to watch

Investors should be aware of potential tax implications on dividend income, especially for amounts exceeding ₹10,000, effective April 1, 2026. The bank must ensure strict compliance with SEBI and RBI regulations throughout the capital issuance process.

Peer comparison

Union Bank of India's capital adequacy ratios (CRAR 18.02%) remain robust, comparable to other public sector banks aiming for growth. The proposed capital raise is a common strategy for banks to fuel expansion and meet regulatory requirements.

Context metrics (time-bound)

• AGM Date: July 10, 2026
• Proposed Capital Raise: Up to ₹8,000 crore
• Recommended Dividend: ₹5 per equity share
• Book Closure: July 4, 2026, to July 10, 2026
• Authorised Capital: ₹10,000 crore (March 31, 2026)
• Paid-up Capital: ₹7,633.60 crore (March 31, 2026)
• Govt Holding: 74.76% (March 31, 2026)

What to track next

Shareholders should closely monitor the outcome of the AGM, particularly the approval of the capital issuance. Tracking the bank's strategic implementation of the raised funds for business expansion and its continued adherence to capital adequacy norms will be crucial.