Bank of Baroda gains as board plans to review fund-raise proposal on Dec 15

Shares of Bank of Baroda gained 1 percent to Rs 218 on December 13 after the lender said that its board will on December 15 review a proposal to raise funds. The Bank Nifty index was down 0.3 percent to 46,958 levels, as of 12:30pm.

In the past one week, the stock of this public sector lender zoomed over 10 percent as against a 0.3 percent rise in the Bank Nifty index.

“Bank of Baroda’s capital-raising committee is scheduled to meet on December 15 to discuss and finalise the quantum of the first tranche of Tier-2 or sub-debt instruments issue within the board-approved capital raising plan,” the lender said in an exchange filing on December 12.

Earlier, the state-run lender also floated plans to raise up to Rs 15,000 crore through Tier-II and infrastructure bonds to fund business growth.

In the July-September quarter, the PSU lender reported a 28.3 percent on-year rise in net profit on the back of improved asset quality and healthy core income. The bank’s net interest income (NII) grew 6.4 percent YoY in Q2FY24.

Analysts at Geojit Financial Services shared a ‘buy’ rating on the counter, with a target price of Rs 222 apiece. “Bank of Baroda is well-positioned for strong growth in NII, driven by the expanding loan book. While margins are expected to remain under pressure due to repricing of deposits at higher costs, the bank’s fee income traction is expected to continue,” the brokerage firm said.

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