BoB Rises 5 Per Cent On ADR Offering Hopes

Mumbai, December 24: | Updated: Dec 25 2002, 05:30am hrs
Public sector Bank of Baroda (BoB) rose on Tuesday on prospects of its American Depository Receipt (ADR) float.

BoB attracted intense buying interest after it said that it would go in for GAAP.

On The Stock Exchange, Mumbai (BSE), the stock of the state-run bank rose 4.9 per cent to close at Rs 71.60 as against its previous close at Rs 68.05.

A total number of 7,53,371 shares of the bank changed hands on the counter on Tuesday.

Dealers said that the surge in BoB comes on news that the bank is planning to draw up accounts according to US-GAAP. This seems the first step by the bank towards making an issue of American Depository Receipts.

According to reports, the bank is planning on an ADR or rights issue once the scrip of BoB crosses the Rs 85-per-share-mark on BSE. BoB will now seek board of directors approval for making its balance sheet US (GAAP)-compliant.

Banking analysts say the move will increase BoBs capital adequacy ratio (CAR) and could also help expand business.

Meanwhile, in 34 sessions between 1 November and 23 December 2002, BoB has gone up by 51.2 per cent to Rs 68.05 from Rs 45.

The rise is further attributed to the passage of the Securitisation Bill in Parliament, which allows lenders to attach assets of defaulting borrowers without having to go to court for the purpose.