Union Bank Plans ₹20,000 Crore Capital Raise Via Long-Term Bonds

Union Bank of India has approved a plan to raise up to ₹20,000 crore through the issuance of long-term bonds. This is a part of its strategy to fund infrastructure and affordable housing projects.

The decision was taken by the bank’s Committee of Directors for fundraising (non-capital) at its meeting held on 16 March 2026.

How Will The Bank Raise Funds?

The bank intends to increase the funds in one or more tranches according to the market conditions and the funding needs.

Out of the approved sum, Union Bank can raise up to ₹7,500 crore in FY26. This includes:

• Base issue of ₹3,000 crore.

• Greenshoe option of ₹4,500 crore.

The bonds are expected to carry a 10-year tenor, in line with the long-term nature of infrastructure financing.

Union Bank claimed that the money raised through the issuance of the bonds would be utilised in the development of infrastructure and affordable housing.

What About Green And Sustainable Bonds?

Besides the primary fundraising strategy, the bank has also been allowed to raise up to ₹5,000 crore under green or sustainable bonds.

Environmentally friendly projects such as renewable energy, clean transportation, and sustainable infrastructure are usually financed using these instruments.

Also Read - Meta Stock Jumps On Layoff Buzz

What Does This Mean For Investors?

For investors, this shift brings attention back to long-term funding needs in infrastructure and housing, areas where public sector banks continue to play a key role. Large bond issuances of this kind also point to banks looking to raise money beyond their usual deposit base.

Green and sustainable bonds are becoming more common, reflecting a gradual shift towards environmental, social, and governance (ESG)-focused financing. This could catch the attention of institutional investors looking to add exposure to environmentally aligned assets.

In the long run, these types of fundraising would enhance the growth of credit in priority sectors, which could boost the banking system as well as the economy.

Sources:

Economic Times

CNBC TV18