Mumbai, Dec. 27: The Bank of India (BoI) is planning to raise Rs 1,350 crore through a qualified institutional placement (QIP). The money will meet requirements for capital to fulfil Basel-II criteria and finance the banks expansion plans.
The BoI will be the first public sector bank to come out with a QIP issue. The shares will be offered to public sector enterprises and mutual funds, but foreign institutional investors have been left out. It will lead to a dilution of the governments holding in the bank to 64.47 per cent from 69.47 per cent now.
Chairman and managing director T.S. Narayanasami said the bank would issue over 3.77 crore equity shares and at the floor price, would raise between Rs 1,350 and Rs 1,400 crore. The floor price will be decided about a month before the issue but is believed to be not less than Rs 350-360 per share. The bank did not opt for a follow-on offering as it is time consuming.
The BoI had ventured into life insurance with the Union Bank of India and Japanese insurance firm Dai-Ichi. It is now weighing options in asset management.