BOI Eyes 
3,000 Cr Equity Capital via QIP
Bank of India is intending to secure 
3,000 crore equity capital through a qualified institutional placement (QIP) offer to boost business growth and meet regulatory compliance.
"The bank is in the process of raising Rs 3,000 crore through QIP and seven book running lead managers have been appointed for the proposed issue," says source close to the development. The management of the bank took part in one-on-one and group discussion for the roadshow during August 10-23, 2021, the bank states in a filing.
Total 26 investors participated in the roadshow includes Yes Bank, IDFC Bank, HDFC Treasury, ICICI Prudential Life, Edelweiss, SBI Life, Mirae, Kotak Life, Federal Bank, Marshal Wace, Polunin among others, the bank said.
The purpose of the issue is not only to fuel regular business growth, but also to deploy capital for improving technical platform of the bank, co-lending digital operations, tie-ups with fintech companies, and synchronisation of tech platform with overseas and domestic operations, according to the sources.
The bank would also use the proceeds of the QIP for developing app based retail loan applications and provide electronic bill discounting facility, they added.
According to sources, "Also, Government of India, our promoter is currently holding 90.34 per cent stake in the bank as of June 30, 2021. With the proposed QIP of Rs 3,000 crore, the promoter''s stake will come down to a substantial level and as a result, the compliance with Sebi guidelines of maintaining minimum public shareholding will be ensured."
Bank of India earned a net profit of Rs 720 crore in June quarter 2021-22. In FY21, there was an overall profit of Rs 2,160 crore. The lender had suffered a net loss of Rs 2,960 crore in FY20 and of Rs 5,550 crore in FY19.
"Around 88 per cent of the gross advances are comprised of A rated and above as well as GGA (government guaranteed advances) segment advances. Most of the bank''s gross advances presently comprise secured and good rated assets.
"The bank''s focus going forward would be towards RAM (retail, agri, MSME) and GGA segments, particularly with the emphasis on the good rated and sovereign guaranteed advances, so that the bank can maintain asset quality in future," said a source.
Furthermore, the bank has identified total restructuring book of not more than Rs 11,500 crore. Out of this, the bank has restructured Rs 7,300 crore till June 2021 and the rest of the restructuring will be made before the threshold date of September 30, 2021.
"So, together with the restructuring and SMA (special mention accounts) 2 portfolios, the stress loan book stood at less than 3 per cent on gross advances (as on June 2021) and the same is significantly low, in comparison to other peer banks," they add.
