Bank of Baroda to raise up to ₹8,500 crore via QIP, other modes

Bank of Baroda intends to raise funds through a Qualified Institutional Placement (QIP) or other modes, subject to regulatory approvals.

“The Board of Directors of our Bank in its meeting held today i.e. 13.02.2025 has approved raising of capital up to ₹8,500 crores by way of common equity capital by various modes including QIP in suitable tranches up to March 2028 and beyond, as required,” the lender said in an exchange filing.

QIP is a method by which listed companies raise funds by issuing equities to qualified institutional buyers.
Brokerage firms slashed target prices of the PSU lender after its Q3 net interest income (NII) missed consensus estimates and declined 2% sequentially led by a fall in NIM (net interest margins).Global brokerage firms Jefferies and HSBC reduced the target price to Rs 250 per share. Jefferies said the Q3 profit figure was ahead of estimates due to lower provisions.

During the quarter, the lender’s net profit increased 6% year-on-year to ₹4,837 crore in the quarter ended December 2024 from ₹4,579 crore a year ago mainly due to strong rise in non-interest income despite slow loan growth and fall in margins.

BoB CEO Debadatta Chand said the bank expects to end the current fiscal year with a NIM of between 3% and 3.10%, lower than the 3.10-3.20% estimate at the beginning of the year, but better than the third quarter largely as deposits are likely to be repriced at a lower rate.

“We are mindful of our credit-to-deposit ratio of 84% which is near the peak of our expectations but with deposits expected to grow 9-11% and advances growth seen at 11-13% we expect to be closer to 80%,” Chand added.

Shares of Bank of Baroda settled 0.83% on Thursday at ₹210.78. The stock has declined 13% so far this year.