Bank Of India To Raise Rs 4,500 Crore Via QIP

The Bank of India is planning to raise funds via a qualified institutional placement, according to people with knowledge of the matter.

The public sector lender is planning to raise Rs 4,500 crore, and the announcement is expected this week, the people said on the condition of anonymity.

The development was first reported by CNBCTV18 on Monday.

The bank's board had earlier approved a plan to raise up to Rs 6,500 crore in fiscal 2024, according to an exchange filing in April.

The public sector lender, back then, had planned to raise up to Rs 4,500 crore via fresh equity capital, in the form of a follow-on public offer, QIP, rights issue, preferential issue, and/or additional tier-1 bonds.

However, it planned to raise up to Rs 2,500 crore through Tier-2 bonds, the exchange filing said.

The bank's second-quarter standalone net profit jumped 52% to Rs 1,458 crore. This rise was on the back of a drawdown in provisions during the September quarter.

The provisions fell 57% year-on-year to Rs 818 crore due to standard and sub-standard assets, said Rajneesh Karnatak, chief executive officer and managing director of Bank of India, in a post-earnings press briefing.

The net interest income, or core income, rose 13% year-on-year to Rs 5,740 crore. Other income, too, rose to Rs 1,687 crore, up 19% year-on-year.

The overall net interest margin remained flat quarter-on-quarter at 3.04%.

The lender's asset quality improved in Q2 FY24, with the gross non-performing asset ratio falling 83 basis points quarter-on-quarter to 5.84%. Sequentially, the net NPA ratio, too, fell 11 basis points to 1.54% in the quarter ended in September.