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Bank of Baroda shares gain 4% as lender closes QIP round successfully

From the start of the fiscal 2020-21, Bank of Baroda stock gained 62.28% against a gain of 72.72% in the benchmark index, Sensex. Photo: iStockPremium
From the start of the fiscal 2020-21, Bank of Baroda stock gained 62.28% against a gain of 72.72% in the benchmark index, Sensex. Photo: iStock

  • The capital raising committee on Tuesday approved the closure of the QIP issue pursuant to the receipt of application forms and the funds in the escrow account from eligible qualified institutional buyers. The issue had opened on 25 February

Mumbai: Shares of Bank of Baroda rose as much as 4.5% on Wednesday after the state-run lender successfully closed the qualified institutional placement (QIP) issue to raise up to 4,500 crore.

At 12:15 pm, the bank's stock was at 86.10, up 3.5% from its previous close, while the benchmark index, Sensex gained 1.19% to 50897.48.

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The capital raising committee on Tuesday approved the closure of the QIP issue pursuant to the receipt of application forms and the funds in the escrow account from eligible qualified institutional buyers. The issue had opened on 25 February.

Last week, the committee had approved raising up to 4,500 crore through an issue of equity shares through QIP route.

The committee approved the issue price of 81.70 per equity share, including a premium of 79.70, at a discount of 5% to the floor price of 85.98 apiece, BoB said in a regulatory filing on Tuesday.

It added that the confirmation of allocation note will be sent to the eligible qualified institutional buyers, intimating them of allocation of equity shares pursuant to the issue.

BoB intends to utilize the net proceeds towards augmenting the bank's Tier I Capital to meet the Basel III norms, support growth plans, enhance business of the bank, and for general corporate requirements or any other purposes, as may be permissible.

In June 2020, Bank of Baroda had mopped up 2,000 crore by issuing bonds to fund its growth plans.

From the start of the fiscal 2020-21, Bank of Baroda stock gained 62.28% against a gain of 72.72% in the benchmark index, Sensex.

BoB reported a net profit of 1,061.11 crore for the quarter ended 31 December compared to a net loss of 1,406.96 crore for the same quarter a year earlier. Net interest income, the difference between interest earned and interest expended rose 9% to 7,749 crore for the December quarter.

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