Bank of India to Raise ₹20,000 Crore via Infra Bonds

27 Jun 2025 , 11:53 AM

In a board meeting held Thursday, the state-owned lender Bank of India approved a proposal to raise as much as ₹20,000 crore via long-term infrastructure bonds over the course of FY2025–26. The funding is expected to support the bank’s capital adequacy and offer more headroom for lending expansion.

Just weeks earlier, the bank had posted a strong set of financials for the March quarter. Its net profit jumped 82.5% year-on-year to ₹2,626 crore, up from ₹1,439 crore a year ago. The earnings beat was supported by stable margins, although the rise in net interest income was relatively modest up 2.1% to ₹6,063 crore.

The bank reported a steady improvement, with gross NPAs narrowing to 3.27% from 3.69% and net NPAs inching down to 0.82%, compared to 0.85% a year earlier. These numbers suggest that legacy stress may finally be clearing.

Bank of India isn’t alone in tapping markets for fresh capital. Union Bank of India, earlier this week, also received board approval to raise ₹6,000 crore, with the plan split evenly between equity and debt instruments. The equity portion ₹3,000 crore could be raised via routes such as a rights issue, FPO, or qualified institutional placement (QIP). The remaining ₹3,000 crore is earmarked for AT1 and Tier-2 bonds.

At the same time, the country’s largest lender, State Bank of India, is also preparing for a major fundraising push. According to people familiar with the matter, SBI has appointed six bookrunners for a ₹25,000 crore QIP that was cleared by its board in May. The banks on the deal reportedly include HSBC, Citi, Kotak, Morgan Stanley, ICICI Securities, and SBI Capital Markets, suggesting a high-profile issuance on the horizon. Across the board, the fundraising spree signals a broader shift.

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