BOI up 3% after reports suggest bank plans to raise additional Rs 5,000 cr

Bank of India (BOI) shares gained 3.2 per cent in Wednesday's trade and logged an intraday high at Rs 118.15 per share. The stock climbed after reports suggested that the bank is planning to raise an additional Rs 5,000 crore through infrastructure bonds.

 

Around 12:28 PM, Bank of India share price was up 2.02 per cent at Rs 116.3 per share. In comparison, the BSE Sensex was up 0.15 per cent at 80,967.75. The market capitalisation of the company stood at Rs 52,902 crore. The 52-week high of the stock stood at Rs 158 per share and 52-week low of the stock stood at Rs 96 per share.

 

The public sector lender, as per reports, is looking to raise an additional Rs 5,000 crore through infrastructure bonds, against the backdrop of soft interest rate trends. 

 

In the last week of November, BOI raised Rs 5,000 crore through a 10-year infrastructure bond issuance at a coupon rate of 7.41 per cent.

 

These bonds are particularly advantageous for banks as they are exempt from regulatory reserve requirements such as the statutory liquidity ratio (SLR) and cash reserve ratio (CRR).

 

In July, BOI had raised Rs 5,000 crore through a similar 10-year infrastructure bond offering at a slightly higher coupon rate of 7.54 per cent. In total, the Mumbai-based lender has raised Rs 10,000 crore in two tranches. 

 

A BOI official said the appetite for infrastructure bonds is good. The plan for raising an additional Rs 5,000 crore is in the discussion stage. The bank may go to the board for approval to raise additional amounts through infra bonds depending on liquidity conditions and pricing trends in the market, he added.

 

BOI is a major public sector bank in India, founded in 1906 and headquartered in Mumbai. It is one of the oldest and most prominent banks in the country, offering a wide range of banking services to individuals, businesses, and government entities. As a government-owned bank, it operates under the supervision of the Reserve Bank of India (RBI) and is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

 

In the past one year, Bank of India shares have gained 8.1 per cent against Sensex's rise of 17.3 per cent.