Bank of India QIP subscribed over 4.11 times, raises ₹4,500 crore
Bank of India recorded a robust demand for its qualified institutional placement (QIP) of shares, with a subscription rate of 4.11 times. The QIP, originally set at a base size of ₹2,250 crore, also incorporated a greenshoe option of an additional ₹2,250 crore to accommodate potential oversubscription.
The financial institution revealed that it garnered a total of 104 bids, amounting to ₹18,483 crore, the company said in its official exchange filing. The government-owned lender allocated shares to qualified institutional buyers at ₹100.20 per share, representing a discount of approximately 5% compared to the floor price of ₹105.42.
In April, the bank secured board approval to raise ₹4,500 crore through avenues such as a QIP, rights issue, or additional Tier-1 bonds. Furthermore, the bank gained approval to issue Basel-III compliant Tier-2 bonds, with a cap of ₹2,000 crore.
As of the end of September, the bank’s capital adequacy ratio stood at 15.63%, with CET-1 capital at 12.60%. Notably, in the September quarter, the bank achieved a remarkable 52% year-on-year (YoY) growth in net profit, amounting to ₹1,458 crore. Additionally, the net interest income experienced a 13% year-on-year increase, reaching ₹5,740 crore.
The bank’s shares have delivered impressive returns to investors, yielding nearly a 30% gain year-to-date. Looking at a three-year horizon, the returns stand even more striking, with an increase exceeding 116%. The bank’s shares finished 0.5% higher on the National Stock Exchange, reaching ₹114.30 on Friday.
On December 5, the company had announced the launch of its QIP, which is the bank’s first QIP launch since 2021.
“…Approved the floor price of the Issue, being Rs. 105.42 per equity share (“Floor Price”) based on the pricing formula as prescribed under Regulation 176 of the SEBI ICDR Regulations,” said Bank of India in a regulatory filing to the stock exchanges.
The public sector lender also said that a meeting of the Capital Issue Committee is scheduled for December 8, 2023. During this meeting, discussions will be held regarding the issue price and any permissible discounts under the SEBI ICDR Regulations.
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Published: 08 Dec 2023, 10:32 PM IST
Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.