UCO Bank – one of the public sector banks in India is planning to reduce government stake. This has again raised concerns of privatisation. UCO Bank is planning to reduce government stake from 90.95% to 75%.
In January, the Indian government approved a ₹10,000 crore fundraising plan for five public sector banks (PSBs). The government’s excess stake in these banks, based on current market prices, is estimated to be worth nearly ₹50,000 crore. The fundraising will be carried out through the Qualified Institutional Placement (QIP) route. The five banks selected for this initiative include
- Central Bank of India
- Bank of Maharashtra
- Indian Overseas Bank (IOB)
- Punjab & Sind Bank
- UCO Bank
As of December 2024, the Indian government holds a majority stake in these five banks. The shareholding details are as follows
- Bank of Maharashtra: 79.6%
- Punjab & Sind Bank: 98.25%
- Indian Overseas Bank (IOB): 96.38%
- UCO Bank: 95.39% (now 90.95%)
- Central Bank of India: 93.08%
UCO Bank has announced plans to issue up to 270 crore new equity shares in the 2025–26 financial year. This move aims to reduce the government’s ownership in the bank to 75%, aligning with the Securities and Exchange Board of India’s (SEBI) minimum public shareholding norms.
The decision follows a successful Qualified Institutional Placement (QIP) in March 2025, where the bank raised ₹2,000 crore. This capital infusion decreased the government’s stake from 95.39% to 90.95%. The upcoming share issuance is expected to further dilute the government’s holding to the targeted 75%.
Based on the current market price of approximately ₹31 per share, the new issue could be valued at around ₹8,000 crore. The bank’s Managing Director and CEO, Ashwani Kumar, stated that this strategic move will not only comply with regulatory requirements but also strengthen the bank’s capital base.
No comments:
Post a Comment