India’s state-owned lender Bank of Baroda is reportedly planning to raise INR119bn ($1.72bn) during the current fiscal year.
According to a report by news agency PTI, the plan includes procuring INR15bn from Bank of Baroda Employee Share Purchase Scheme (BoB-ESPS).
Bank of Baroda fundraising:
The bank has decided to raise size of ESPS scheme to 150 million shares with a face value of INR2 each. In a notice to its shareholders, Bank of Baroda told that the ESPS will be within overall limit of capital plan this fiscal.
The remaining amount will be procured through different procedures including qualified institutional placement (QIP), follow on public offer (FPO) or rights issues. It may also employ a combination of these strategies to raise the amount.
The move will be finalised following the shareholders’ approval at its annual general meeting later this month.
With the new funding, the state-owned lender will meet its general business requirements and expand operations.
Bank of Baroda increased the size of ESPS following its merger with the Dena Bank and Vijaya Bank. The step was taken to retain the employees of the erstwhile banks and create a sense of ownership and participation among them by sharing the company value, the news agency added.
The three-way bank merger, which became effective in April this year, created the third largest bank in India after SBI and HDFC Bank.
Last month, the combined Bank of Baroda announced the rationalisation of 800-900 branches, as a part of the consolidation plans.