MUMBAI: Bank of India (BoI) has raised close to Rs 1,360 crore at a premium of Rs 350 a share through qualified institutional placement (QIP). This makes BoI the first public sector bank to raise money through the QIP route. The bank has raised fresh equity which would dilute the government’s holding by 5%. Investors paid Rs 360 a share which has a face value of Rs 10.
Sources said the issue was subscribed by domestic investors, including mutual funds, insurance companies and many state-owned banks. Shares of BoI closed at Rs 354.80 on Friday on the BSE.
Many government-owned banks may now consider raising money through this route which is quicker and less expensive. Syndicate Bank said this week that it planned to raise money through the QIP route rather than a follow-on issue.
The bank is planning to dilute government holding by 8-9% from the current level of 66.4%. Delhi-based Punjab & Sind Bank is considering to raise capital through a private placement.
The unlisted bank is considering to raise capital equivalent to 20% of its restructured capital which will dilute government’s holding by 5-10%. BoI closed the issue on February 6 by offering 3.7 crore shares to investors and raising an aggregate amount of Rs 1,359.8 crore. The bank had earlier set a floor price of Rs 359 for a share. “Given the low market sentiments, BoI’s issue has done well,” observed a market analyst.
The bank had reported a 100% rise in net profit for two consecutive quarters ending December 2007. Following the QIP, the government holding will be 64.47% down from 69.47%.
Sources said the issue was subscribed by domestic investors, including mutual funds, insurance companies and many state-owned banks. Shares of BoI closed at Rs 354.80 on Friday on the BSE.
Many government-owned banks may now consider raising money through this route which is quicker and less expensive. Syndicate Bank said this week that it planned to raise money through the QIP route rather than a follow-on issue.
The bank is planning to dilute government holding by 8-9% from the current level of 66.4%. Delhi-based Punjab & Sind Bank is considering to raise capital through a private placement.
The unlisted bank is considering to raise capital equivalent to 20% of its restructured capital which will dilute government’s holding by 5-10%. BoI closed the issue on February 6 by offering 3.7 crore shares to investors and raising an aggregate amount of Rs 1,359.8 crore. The bank had earlier set a floor price of Rs 359 for a share. “Given the low market sentiments, BoI’s issue has done well,” observed a market analyst.
The bank had reported a 100% rise in net profit for two consecutive quarters ending December 2007. Following the QIP, the government holding will be 64.47% down from 69.47%.
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