UCO Bank, a state-owned bank, plans to raise up to Rs 2,000 crore through a Qualified Institutional Placement (QIP) during the current quarter to comply with the Securities and Exchange Board of India’s (Sebi) minimum public shareholding (MPS) norms. The government currently holds 95.39% stake in the bank, and the QIP will reduce this holding by 3%. The bank has appointed merchant bankers and legal advisors and is in the process of meeting investors, including mutual funds.
The QIP is necessary to comply with Sebi’s rule that all listed companies must maintain an MPS of 25%. Of the 12 public sector banks, five are yet to comply with this norm, and the government’s holding is above 75% in these banks. The government has extended the deadline for meeting the MPS norms for central public sector enterprises and public sector financial institutions till August 2026.
In its quarterly results, UCO Bank reported a 27% increase in net profit at Rs 639 crore for the quarter ended December 2024, driven by both interest and non-interest income. The bank’s operating profit also rose to Rs 1,586 crore, while total income increased to Rs 7,406 crore. Interest income rose to Rs 6,220 crore, and Net Interest Income (NII) increased by 20% to Rs 2,378 crore.
The bank’s QIP plan has been approved by the government, and the bank aims to launch the issue at an opportune time during the current quarter. The QIP is expected to be a significant step towards increasing the bank’s capital base and reducing the government’s holding below 75%.