BoI to raise Rs 1,400 cr via QIP

Bank of India (BoI) will raise Rs 1,300-1,400 crore through qualified institutional placements by the end of January.

A senior official told NewsWire18 "a 5 per cent dilution will mean at current market price, we will raise Rs 1,300-1,400 crore. "The floor price will be decided 30 days prior to the issue. And as per Securities Exchange Board of India (Sebi) norms, the price cannot be less than Rs 350-360," the official said.

Following the qualified institutional placements issue, government's stake in the public sector bank will fall to 64.5 per cent from 69.5 per cent currently. 
 

VITAL STATISTICS
Rs crore	Performance of the bank
	2005-06	2006-07
Deposits	93,932.03	119,881.74
Advances	65,173.74	84,935.89
Interest	7,028.70	9,180.33
Net Profit	701.44	1,123.17
Gross NPA	2,479.18	2,100.49
Net NPA	969.50	632.03
CAR (%)	10.75	11.58

Lead managers of the qualified institutional placements will be JM Financial, SBI Capital Markets, Kotak Mahindra Bank, and Edelweiss Securities. "There may be a slight premium, following which the price can be around Rs 405," he said.

Capital adequacy ratio of the state-owned bank will go up to around 13 per cent post the equity issue from 12.50 per cent, after taking into account Basel II norms, the official said.

"We will not have any need for raising capital for next couple of years," he said.

The bank will take a final decision on qualified institutional placements at its board meeting on Thursday, following which it will seek approval from the government and Reserve Bank of India.

"We have already sounded them (government) out. The board will not have gone ahead with the issue if there were no blessing from them," the official said.

The bank will place the shares to domestic investors under the qualified institutional placements.