Bank of Baroda shines on fundraising plan

Shares of Bank of Baroda marked a positive session and jumped nearly 4 per cent intraday on BSE after the public lender said that it has received approval for raising up to Rs. 2,150 crore in Tier-I, II bonds.

On Monday, the public sector bank had informed that the capital raising committee of the bank has approved today i.e. on 26.08.2019, the issuance of Basel III compliant additional Tier I bonds for aggregate total issue size not exceeding Rs. 1,650 crore, with a base issue size of Rs. 500 crore and a greenshoe option to retain oversubscription up to Rs. 1,150 crore.

The PSU bank has already raised around Rs. 3,500 crore loans from non-banking finance companies (NBFCs) in the June quarter. For the year March 2019, the bank had purchased assets worth around Rs 10,000 crore from NBFCs and housing finance companies.

It must be noted that the public sector lender is looking to buy out assets worth around Rs. 6,000 crore from the NBFCs this quarter that are facing the brunt of credit crunch.

 Additionally, the bank has also announced that it is mulling tie up opportunities with 14 NBFCs such as Cholamandalam Finance, Indiabulls Housing Finance, Hero Fin Corp and Adani Capital to disburse loans under RBI’s co origination model. The bank has already disbursed Rs. 50 crore worth of loans in retail and MSME portfolios, under the co-origination model with two of its partner NBFCs Srei Finance and Edelweiss Financial.

On Tuesday, the stock of Bank of Baroda closed at Rs. 97.25, up by Rs. 2.20 or 2.31 per cent on the BSE. The stock had opened at Rs. 97.20 and made an intraday high of Rs. 99.20 and intraday low of Rs. 96.60.