Bank of India raises ₹5,000 Crore in infrastructure bonds at 7.54% Interest

19 Jul 2024 , 01:07 PM

On July 18, Bank of India successfully raised ₹5,000 Crore through long-term infrastructure bonds at an annual interest rate of 7.54% via the NSE electronic bidding platform. The issuance was structured with a base size of ₹2,000 Crore and an option to increase by ₹3,000 Crore, known as the green shoe option.

The bond issuance attracted substantial interest, with a total of 127 bids amounting to ₹15,318 Crore. Out of these, 57 bids were successful, collectively securing the full ₹5,000 Crore target.

The raised funds are earmarked for financing long-term infrastructure projects and affordable housing, aligning with RBI guidelines. Importantly, these funds are not designated for any specific project but are intended to support various initiatives within these sectors.

At the time of writing on July 19, 2024 at 12:58 pm shares of Bank of India is  currently trading at ₹121.27 which is a 1.92% dip than the previous close. Bank of India stock has gained a total of 51% in the last one year, and witnessed a 7.27% dip since the beginning of the year.

Earlier in May, the bank’s board approved a capital raising plan of up to ₹5,000 Crore through Basel III compliant additional tier 1 and tier 2 bonds, with an equal split of ₹2,500 Crore each. This decision followed a strong financial performance report for the fourth quarter of FY24, where Bank of India reported a 7% increase in net profit, reaching ₹1,439 Crore.

The bank’s gross non-performing asset (NPA) ratio improved to 4.98% in the March quarter, down from 5.35% in the previous quarter and 7.31% a year ago. Similarly, the net NPA ratio also saw improvement, standing at 1.22% as of March 31, compared to 1.41% on December 31, 2023, and 1.66% a year earlier.

Bank of India, headquartered in Bandra Kurla Complex, Mumbai, is a prominent Indian public sector bank founded in 1906 and nationalized in 1969. As a founding member of SWIFT, the bank provides cost-effective financial processing and communication services globally. As of December 31, 2023, Bank of India’s total business volume was ₹1,272,887 Crore (approximately USD 150 billion). 

Initially established with a paid-up capital of ₹5 million and 50 employees, Bank of India has expanded significantly, growing into a major institution with a strong national presence and substantial international operations.