State-owned Bank of India?s qualified institutional placement issue has been subscribed 1.86 times despite market volatility.
The issue, which opened on February 4 and closed the next day, will be listed on the Bombay Stock Exchange and the National Stock Exchange on Monday.
After issuing a total of 3,77,72,600 shares priced at Rs 360 a share, the bank raised Rs 1,360 crore of tier-I capital. The QIP would bring down the government?s holding in the bank to 64.47% from 69.47%
?We took the QIP route to meet our capital-raising requirement for Basel II compliance and to fuel our business growth. The QIP saved time and costs by one-third,? bank chairman and managing director TS Narayanasami added.
It was possible only due to the requisite and timely sanctions by the regulators and the government, said Narayanasami. BoI, on the lookout for acquiring a mid-sized bank abroad, has to meet Basel II norms March-end and needs money to expand its overseas presence. The bank has applied for opening branches in Cambodian cities, Glasgow and Dhaka. It is also aiming to open a 7th branch in the UK.
Among 35 investors that bid for the QIP were insurance companies (60%), banks (25%) and mutual funds (15%). In fact, the Rs 1,360 crore tier-I capital permits the bank to raise up to Rs 640 crore through preference shares and Rs 2,000 crore of tier-II capital.