BoB follow-on offer to hit market on Jan 16

Bank of Baroda (BoB) will hit the capital market with its follow-on issue for 7.1 crore equity shares of Rs 10 each public offer next week to raise over Rs 1,500 crore.

The proceeds would help the public sector bank to augment its capital to meet the Basel-II norms and grow its assets and investment portfolio.

The shares would be issued at premium to be decided through book-building. The issue would open for bidding on January 16 and close on January 20. The price band would be announced a day prior to the opening day.

The bank expects to attain a capital adequacy ratio (CAR) of 13.25 per cent after the offer. Its CAR at the end of September 30, 2005 stood at 12.61 per cent. The issue would constitute 19.49 per cent of the total post-issue paid-up capital.

After the follow-on issue, the government's shareholding would come down to 53.81 per cent from 66.83 per cent, chairman and managing director Anil Khandelwal said today.

The bank has no plans to issue shares at discount to retail investors. It has reserved 35 pr cent of public issue size to retail investors, he said.

The bank has asked Karvy Computershare Private, registrar of the issue, to exercise due care to avoid any irregularity in share allotments especially in the backdrop of the multiple demat account scam unearthed in the Yes Bank public issue process, a senior BoB official said.

BOB stock closed lower on Bombay Stock Exchange at Rs 258 on the Bombay Stock Exchange today compared with its previous close of Rs 260.