The bank aims to raise up to Rs 1,000 crore in a private placement and a group of insurers including ICICI Prudential Life and
of India is in talks for subscription.
Bank of Baroda had no comment. Insurers could not immediately be reached for comment.
The paper will have a maturity of seven years and could offer 7.10 to 7.35% depending on investor response, people familiar with the matter said. The bonds will be auctioned on Friday.
The proceeds will be used to lend to the infrastructure sector and low-cost home buyers in the so-called affordable housing segment.
A recent clarification from the regulator paved the way for insurance companies to bet on such bonds. In an August 3 statement, the Insurance Regulatory and Development Authority of India said investments by insurers in long-term bonds issued by banks for financing infrastructure and affordable housing would not be classified as exposure. in the banking and financial services sector.
This cleared up the confusion about the industry limits an insurance company is required to follow.
Private sector lenders generally dominate the infrastructure bond market.
had sold such bonds in 2015, but public banks are rare in the issues of these instruments. and India Ratings have rated Bank of Baroda’s infra bonds with a triple-A rating and a “stable” outlook.
While Bank of Baroda’s improved profitability in FY2022 was supported by one-off provision reversals and recoveries on certain large corporate exposures, overall profitability remains on an improving trajectory, a ICRA said in a note released last week.
Government is the major shareholder of Bank of Baroda with a 63.97% stake as of March 31, 2022. It had infused Rs 21,739 crore into the bank between FY 2018 and FY 2020.
Bank of Baroda is India’s second-largest state-owned bank by assets, with a market share of 6.7% in loans and 6.5% in deposits as of March 31, 2022, according to ICRA.
The bank plans to raise additional Tier 1 bonds of around Rs 2,500 to 3,500 crore, dealers said. These debt securities will help strengthen the capital base.
Shares of Bank of Baroda have gained 51% this calendar year, beating the broader BSE Bankex sector barometer which has added almost 7%.
The bank aims to raise up to Rs 1,000 crore in a private placement and a group of insurers including ICICI Prudential Life and
of India is in talks for subscription.
Bank of Baroda had no comment. Insurers could not immediately be reached for comment.
The paper will have a maturity of seven years and could offer 7.10 to 7.35% depending on investor response, people familiar with the matter said. The bonds will be auctioned on Friday.
The proceeds will be used to lend to the infrastructure sector and low-cost home buyers in the so-called affordable housing segment.
A recent clarification from the regulator paved the way for insurance companies to bet on such bonds. In an August 3 statement, the Insurance Regulatory and Development Authority of India said investments by insurers in long-term bonds issued by banks for financing infrastructure and affordable housing would not be classified as exposure. in the banking and financial services sector.
This cleared up the confusion about the industry limits an insurance company is required to follow.
Private sector lenders generally dominate the infrastructure bond market.
had sold such bonds in 2015, but public banks are rare in the issues of these instruments. and India Ratings have rated Bank of Baroda’s infra bonds with a triple-A rating and a “stable” outlook.
While Bank of Baroda’s improved profitability in FY2022 was supported by one-off provision reversals and recoveries on certain large corporate exposures, overall profitability remains on an improving trajectory, a ICRA said in a note released last week.
Government is the major shareholder of Bank of Baroda with a 63.97% stake as of March 31, 2022. It had infused Rs 21,739 crore into the bank between FY 2018 and FY 2020.
Bank of Baroda is India’s second-largest state-owned bank by assets, with a market share of 6.7% in loans and 6.5% in deposits as of March 31, 2022, according to ICRA.
The bank plans to raise additional Tier 1 bonds of around Rs 2,500 to 3,500 crore, dealers said. These debt securities will help strengthen the capital base.
Shares of Bank of Baroda have gained 51% this calendar year, beating the broader BSE Bankex sector barometer which has added almost 7%.