The retail public now holds a large chunk of Union Bank of India's equity, post its initial public offering (IPO).
Post allotment, the general public holds over 31 per cent of the expanded share capital, while the government's holding has dropped to 60.85 per cent of the bank's Rs 468 crore share capital.
The issue attracted heavy response from the retail and corporate investors with over 75 per cent of the applications coming from these two segments. The bank allotted corporate India 4.3 per cent of the expanded share capital. Other banks, financial institutions and insurance companies together have been allotted 2.78 per cent of the expanded equity base, while mutual funds and the Unit Trust of India (UTI) has 0.78 per cent.
Prior to the IPO, Union Bank returned Rs 58 crore to the central government, resulting in a reduction in the bank's capital to Rs 280. The IPO led to an addition of Rs 188 crore to its capital base.
According to V Leeladhar, chairman and managing director of the bank, "major chunk of the IPO proceeds (Rs 150 crore out of the IPO of Rs 288 crore) will be spent on implementing core banking solutions across 500 branches. The balance will be deployed for normal lending activity."
Meanwhile, Union Bank has sent recovery notices to 330 borrowers aggregating around Rs 450 crore under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Ordinance, 2002. In response to the notices, some borrowers have come forward for settlement, said Leeladhar.
"In the first lot of 30 notices issued, we concentrated on large borrowers. This time when we sent out notices to 300 borrowers, the emphasis has been on small borrowers who have taken Rs 30 lakh and more," he added.
