Bank of Baroda to raise ₹7,500 crore via multiple bond tranches, additional ₹10,000 crore through long-term bonds

Bank of Baroda on Friday, June 5, said its board of directors approved a plan to raise additional capital of ₹7,500 crore through Additional Tier 1 (AT1) and Tier 2 bonds. 

In a filing to BSE, the public sector lender said the additional capital of ₹7,500 crore will be raised in segments during the financial year 2024-25. The Additional Tier 1 and Tier II bonds will have an interchangeability option in India and overseas, according to the exchange filing.

“The above capital will be raised when the market is conducive,” Bank of Baroda stated.

Apart from the additional capital, the public sector lender has received the board's approval to raise ₹10,000 crore through long-term bonds to finance infrastructure initiatives and affordable housing in single or multiple segments during the financial year 2024-25, according to the BSE filing.

Bank of Baroda shares closed 1.35 per cent higher at ₹273.70 after Friday's trading session, as compared to ₹270.05 on the previous day.

The bank's net interest income (NII) increased 8.1 per cent to ₹44,722 crore for the year ended 2024, when compared year on year with ₹41,355 crore in 2023. Apart from the NII, the capital adequacy ratio (CAR) was up 7 basis points to 16.31 per cent in 2024 from 16.24 per cent in 2023.

Meanwhile, the public sector bank has elected Vijay Dube as the shareholders' director, who will take office on July 9, according to the exchange filing.

Bank of Baroda has been rated “BBB-” with a stable outlook in terms of Long Term Issuer Default Rating from Fitch Ratings as of April 16, 2024, according to the credit rating agency.