The Union Bank of India Aims to Raise Rs 470 Crore by ESPS
Kolkata: State-owned Union Bank India has fixed the price band for its employees stock purchase scheme for Rs 58-59%, share looking to raise Rs about 470 crores, people familiar with the matter said the issue would be opening on 5th March.
There are two ways in which ESPS helps banks. Firstly by expanding capital with employee participation second by paring government stake as state-owned banks are bound to reduce government holding to below 75% following security & exchange board of India rule.
But in Union banks case the promoter holding has not been a significant issue as the government holds 67.43% in the bank as on December last year.
Union Bank, a Mumbai based lender, has also opened the door to immediate retirees for share purchase under ESPS. Banks typically offer up to 25% of the discount on the price of shares that are offered under the schemes. This will provide the issue and allot up to eight crore new equity shares to the employees that are eligible.
Its share price jumped from 7.91% to Rs 77.05 on BSE on last Friday in line with grains in banking shares, while the Sensex rose from 0.55% till 36.063.81 points.