E-Paper
BoB to utilise FPO proceeds to meet Basel-II, biz expansion
Bank of Baroda will utilise the proceeds from its 7.1 cr equity offer to comply with Basel-II norms, fund business expansion, including foray into life insurance and stock broking business.
Bank of Baroda will utilise the proceeds from its 7.1 crore equity offer to comply with Basel-II norms, fund business expansion, including foray into life insurance and stock broking business.
The Follow-on-Public offer, which is opening on January 16 and closing on January 20, is likely to fetch the bank Rs 1,600-1,800 crore.
The stocks of BoB closed at Rs 250.95 per share on Tuesday, much higher than the Rs 233 it commanded a month back.
The bank is likely to issue the shares on a discount for which it will fix a price band on the eve of the offer date.
"The proceeds will be utilised for future capital requirement arising out of Basel-II implementation and match growth in asset mainly in loan and investment portfolio," a senior BoB official said here.
The bank will increase funding to corporates, SMEs and infrastructure sector where it sees a greater potential.
Besides, the bank is also eyeing a foray into insurance and broking business where it does not have a presence.
"BoB is holding consultations for the insurance venture which will be tripartite one that will include a domestic and a foreign partner," another official of the bank said.
BoB has also submitted Expression of Interest and is a strong contender to acquire UTI Securities, which will give it a foot-print in stock broking.
Business-wise, the bank is growing by 25-30 per cent year-on-year and the total business (advances and deposits) stood at Rs 1,01,355 crore till September 2005.
BoB has charted a massive overseas expansion in Canada, New Zealand, Sri Lanka, Trinidad & Tobago, Isle of Man, USA, Bangladesh, Maldives, Honk Kong and Singapore.
