Bank of Baroda greenlights Rs 15,000 crore capital raise for strategic expansion

Business Today Desk

Bank of Baroda has announced a significant capital-raising initiative, revealing plans to secure up to Rs 15,000 crore in funds. The decision was formalized by the capital-raising committee in a meeting held earlier today, as reported by the public sector lender in a regulatory filing to the stock exchanges.

This substantial fundraising endeavour includes two key avenues: Firstly, the committee has approved the issuance of tier-II debt bonds, with a total value of Rs 5,000 crore. This encompasses Rs 2,000 crore in 10-year tier-II bonds and an additional Rs 3,000 crore facilitated through the greenshoe option.

The second facet of this financial strategy involves the issuance of infrastructure bonds. Bank of Baroda aims to raise Rs 10,000 crore through this route, initiating with a Rs 2,000 crore issuance of 7-year infrastructure bonds, along with a greenshoe option for an extra Rs 8,000 crore, according to the filing.

This move follows the bank’s recent approval, a month ago on October 11, to raise Rs 10,000 crore specifically aimed at supporting affordable housing and infrastructure projects.

The bank’s financial standing has shown promising growth, with a net profit of Rs 4,253 crore reported in the quarter ending September 2023, marking a 28 percent increase from the previous year’s Rs 4,001 crore. Furthermore, its total income surged to Rs 32,033 crore in the second quarter, compared to Rs 23,080 crore in the corresponding period of the previous fiscal year.

In the latest trading session on November 17, Bank of Baroda’s stock closed at Rs 196.65 on the BSE, reflecting a 0.91 percent decline from the previous day’s closing price.

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