Bank of Baroda Board approves to raise up to Rs 8,500 crore via equity shares

The board of directors at Bank of Baroda, a public sector lender, has approved a plan to raise up to Rs 8,500 crore by issuing common equity shares. This initiative aims to support business growth and comply with regulatory requirements.

The Mumbai-based bank intends to utilize various methods, including Qualified Institutional Placement (QIP), in suitable tranches until March 2028 and beyond, as needed. This plan will be subject to necessary statutory and regulatory approvals, as stated in the bank's filing with the BSE. On the last trading day, the bank's stock closed 0.94% lower at Rs 210.70 per share on the BSE.

Meanwhile, its board also authorized an extension of time up to the end of March 2026 and beyond for raising the remaining capital of Rs 4,000 crore through Additional Tier-I and/or Tier-II debt capital instruments out of the approved Rs 7,500 crore capital-raising plan. This capital-raising plan was approved at a board meeting on July 5, 2024.

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Rating agency CRISIL, when issuing ratings for Bank of Baroda’s Tier-II bonds in November 2024, stated that the public sector lender was adequately capitalized. As of September 30, 2024, the bank's net worth coverage for net non-performing assets (NPAs) improved to 18.7 times, up from 13 times as of March 31, 2024, and significantly increased from 3.5 times as of March 31, 2021.

The capitalization has been supported by infusions from the government in the past. The bank will be able to maintain adequate capitalization over the medium term, backed by capital support from the government, CRISIL added.

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