PSU BANKS PLAN RS 5,000-CRORE QIP AND FRESH FUNDRAISING

UCOBANK Several public sector banks are preparing to raise fresh capital through Qualified Institutional Placements by the end of the third quarter or early fourth quarter of FY27 as they look to strengthen their capital base and reduce the government's stake to comply with the Securities and Exchange Board of India's (SEBI) minimum public shareholding requirements. Indian Overseas Bank is planning to raise Rs 5,000 crore through a QIP, while Punjab & Sind Bank and UCO Bank are also preparing to tap the equity market during this period. Meanwhile, Central Bank of India is looking to reduce the government's shareholding by around 5 percentage points over the next two quarters as part of a phased stake dilution plan. At Rs 5,000 crore, IOB's proposed QIP could be the largest among the four banks based on the fundraising plans indicated so far. The proposed issue sizes of the other lenders have not yet been disclosed. Emails were sent to Indian Overseas Bank, Central Bank of India, Punjab & Sind Bank and UCO Bank seeking confirmation of their proposed fundraising and stake dilution plans. However, the banks had not responded until the time of publication. The proposed fundraising marks another round of capital raising by these lenders, which had previously tapped the equity markets through QIPs in March 2025. During that round, Indian Overseas Bank raised Rs 1,436 crore, Central Bank of India mobilised Rs 1,500 crore, UCO Bank raised nearly Rs 2,000 crore, and Punjab & Sind Bank collected Rs 1,219 crore. Together, the four banks raised approximately Rs 6,155 crore. A Qualified Institutional Placement allows banks to issue fresh shares to qualified institutional investors, thereby raising additional capital and increasing public shareholding while reducing the government's percentage ownership.