PremiumMumbai: State run Bank of Baroda on Thursday said in a notice to exchanges that its board has approved raising upto ₹4500 crore from institutional investors through a so-called qualified institutional placement.
The floor price of the qualified institutional placement is fixed at ₹85.98 per share. The floor price is 4.36% discount to its Thursday's closing price. The stock closed at ₹89.90 on BSE, up 1.2% from its previous close.
"Pursuant to the SEBI ICDR Regulations, the Bank may offer a discount of not more than 5% on the floor price so calculated for the Issue. The issue price will be determined by the Bank in consultation with the book running lead managers appointed for the Issue", the lender said in a notice to exchanges.
According to terms of the deal seen by Mint, the bank is targeting a base deal size of ₹2500 crore with an option to up size of deal by ₹2000 crore
The bank in its offer document said that the proceeds from the issue will be used to augmenting its tier 1 capital to meet the bassel III and to support growth plans and to enhance the business of the bank.
As of December 2020, the lender's tier I capital ratio stood at 10.57% while its tier II capital ratio was at 2.36%. Gross non performing assets fell 8.48% in the December quarter against 10.43% a year ago.
Investment banks ICICI Securities, Axis Capital, BNP Paribas are managing the share sale.
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