Bank of Baroda (BoB) is planning to raise ₹2,000 crore to ₹4,000 crore via a qualified institutions placement (QIP) in the current quarter ending March 31, 2021.
Sanjiv Chadha, MD & CEO, said: “We are looking at accessing the market in the current quarter for a QIP, which might be in the ₹2,000 crore to ₹4,000 crore range.”
Chadha believes BoB’s capital position remains satisfactory as it has already raised about ₹3,700 crore by way of Additional Tier-1 (AT-1) bonds as against ₹4,500 crore it had targeted.
The BoB chief emphasised that if internal accruals and AT-1 inflows are added back (they are not added back in the third quarter as per accounting norms), the Bank’s capital adequacy ratio would have been at 13.41 per cent, which is pretty much the same level at which it had started the current financial year.
Referring to the optimum deployment of surplus in some short-term loans, which carried a higher risk weight of about 150 per cent, Chadha observed that going ahead, as these loans are paid off, there will be a release of capital. On average, BoB’s risk-weighted assets are about 50 per cent of loans.
“So, this capital release along with QIP and also the accruals that we expect, both in the balance part of this year as well as next year, we believe are adequate to take care of any kind of stresses that might be there as also our growth ambitions,” the BoB Chief said.