The Hindu : Business : Bank of India to raise Rs. 1,400 cr.

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Friday, Dec 28, 2007
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Bank of India to raise Rs. 1,400 cr.

Shares will be issued to public sector enterprises; to explore new opportunities

— PHOTO: PTI

BEEFING UP CAPITAL: Bank of India Chairman and Managing Director, T. S. Narayanasami (centre) with Executive Directors, Anil Parulkar (right), and K. R. Kamath, at a press conference in Mumbai on Thursday.

MUMBAI: Bank of India on Thursday said it would raise Rs. 1,350-1,400 crore through qualified institutional placement (QIP) of shares for credit expansion, Basel II compliance and explore new business opportunities.

“The funds will be sufficient as a buffer for future credit expansion or a lucrative joint venture opportunities with other banks or entities,” bank Chairman and Managing Director T. S. Narayanasami told reporters here.

The bank will issue 3.77 crore equity shares only to public sector enterprises and mutual funds subject to SEBI guidelines.

The issue will dilute the government holding in the bank by five per cent to 64.47 per cent.

“We have received the approval of the Ministry of Finance and the bank’s board to raise capital through the QIP... We hope to close the issue by the end of next month,” Mr. Narayanasami said.

The board also approved to convene an extraordinary general meeting of shareholders on January 23 to consider the matter and based on the date, the floor price of the issue has been fixed at Rs. 359 per share.

However, there can be a premium on the price subject to the stock price at the time of the issue.

“Based on the floor price, we could raise Rs. 1,350-1,400 crore through the QIP,” he said. Post-issue the capital adequacy ratio of the bank will be above 13 per cent against 12.57 per cent as on end-September. — PTI

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