Bank of Baroda to raise Rs 13,500 crore additional capital

By: |
April 25, 2020 3:15 AM

The remaining Rs 4,500 crore will be raised by way of additional Tier-1 and Tier-2 capital instruments with an inter-changeability option, the bank said in the release.

The bank had earlier raised Rs 3,397 crore through Additional Tier-I (AT1) bonds in December quarter of 2019.The bank had earlier raised Rs 3,397 crore through Additional Tier-I (AT1) bonds in December quarter of 2019.

The Bank of Baroda board on Friday approved raising of additional capital of up to Rs 13,500 crore, the lender informed stock exchanges through a release. Out of the total amount, the bank will raise Rs 9,000 crore by way of common equity capital through various modes, including qualified institutional placement (QIP).

The remaining Rs 4,500 crore will be raised by way of additional Tier-1 and Tier-2 capital instruments with an inter-changeability option, the bank said in the release. The public sector lender plans to raise the total amount till March, 2021. However, it has specified that window remains open beyond the timeline of March,2021, in case needed.

The bank had earlier raised Rs 3,397 crore through Additional Tier-I (AT1) bonds in December quarter of 2019. The capital adequacy ratio of the bank remained above regulatory threshold level at 13.98%, as on December 31,2019. The Reserve Bank of India (RBI) threshold of capital adequacy ratio is 11.5%. FE reported earlier that Bank of Baroda has sanctioned Rs 606 crore to 4,598 borrowers under Covid-19 emergency credit line till April 19.

Earlier on April 7, Life Insurance Corporation (LIC)-controlled IDBI Bank announced raising upto Rs 7,500 crore in the current fiscal. The borrowing plan of IDBI Bank included AT1 bonds up to Rs 3,000 crore, Tier-2 bonds of up to Rs 3,500 crore and infrastructure bonds up to Rs 1,000 crore by way of private placement during 2020-21. Similarly, public sector lender Bank of India declared in February to raise around Rs 1,500- 2000 crore through QIP.

Finance minister Nirmala Sitharaman had announced in the Budget that public sector banks could tap capital markets for funds. TheFM said a few among them (banks) would be encouraged to approach the capital market to raise additional capital.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Gold loans account for 35% of our loan book and can go up to 45%: CVR Rajendran, Managing Director & Chief Executive, CSB Bank
2Delhi HC restrains Canara Bank from flouting SC’s NPA relief order
3Jana Small Finance Bank plans 600 branches by March next year