Bank of Baroda, which is a state-run bank announced in a notice that its board has already approved the raising of Rs 4500 crores from institutional investors through a well-known qualified institutional placement.
The floor price of this qualified institutional placement is fixed at ₹85.98 per share. The floor price is at a discount of 4.36 percent to its Thursday closing price. The stock was known to be closed at ₹89.90 on BSE, up by 1.2 percent from its previous close.
According to the SEBI ICDR Regulations, the Bank of Baroda might be offering a discount of not more than 5 percent on the floor price that has been calculated for the Issue. The issue price is going to be decided by the Bank after consulting with the book that has been running lead managers who have been appointed for the Issue said the state-run lender in a notice to exchanges.
According to the terms of the deal, as reported, Bank of Baroda has been targeting a base deal size of ₹2500 crore which allows an option to upsize the deal by ₹2000 crore.
In this current offer document, the bank said that all the proceeds from the issue are going to be used for augmenting the tier of the bank, 1 capital to meet the Bassel III and to support the growth plans and enhance the business of the bank.
As of December 2020, The lender’s tier I capital ratio was standing at 10.57 percent while its tier II capital ratio was at 2.36 percent, as of December 2020. It was also reported that the gross non-performing assets fell by 8.48 percent in the quarter that ended in December against 10.43 percent a year ago.
Investment banks, such as Axis Capital, ICICI Securities, and BNP Paribas have been managing the share sale.