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Banking & Finance
BoB to utilise offer proceeds for expansion

NEW DELHI: Bank of Baroda (BoB) will utilise the proceeds from its 7.1 crore equity offer to comply with Basel-II norms, fund business expansion, including foray into life insurance and stock broking business.

The Follow-on-Public offer, which is opening on January 16 and closing on January 20, is likely to fetch the bank Rs 1,600-1,800 crore.

The bank's stock was down 2 per cent today and closed at Rs 251.

The bank is likely to issue the shares on a discount for which it will fix a price band on the eve of the offer date.

"The proceeds will be utilised for future capital requirement arising out of Basel-II implementation and match growth in asset mainly in loan and investment portfolio," a senior BoB official said here.

The bank will increase funding to corporates, SMEs and infrastructure sector where it sees a greater potential.

Besides, the bank is also eyeing a foray into insurance and broking business where it does not have a presence.

The bank is growing by 25-30 per cent year-on-year and the total business (advances and deposits) stood at Rs 1,01,355 crore till September 2005. - PTI

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