CNBC-TV18 news break confirmed: Bank of India launches ₹4,500 crore QIP today

The CNBC-TV18 news break has been confirmed, with the Bank of India announcing the launch of its fund raise through Qualified Institutional Placement (QIP) with an issue size of ₹4,500 crore. The BoI QIP includes a base issue size of ₹2,250 crore, with a greenshoe option of ₹2,250 crore. The public sector lender has set the floor price of its QIP at ₹105.42 per share, set as per the SEBI formula.

The Capital Issue Committee at its meeting held on Tuesday, "Authorised the opening of the Issue today, i.e. December 5, 2023; and c. Approved the floor price of the Issue, being Rs. 105.42 per equity share ("Floor Price") based on the pricing formula as prescribed under Regulation 176 of the SEBI ICDR Regulations," the bank said in a regulatory filing.

The filing further stated that the Bank may offer a discount of not more than 5% on the floor price so calculated for the Issue. The Bank will determine the Issue price in consultation with the Book Running Lead Managers appointed in relation to the Issue.

However, the indicative price at which BoI shares are likely to be placed at QIP may come at ₹100.2 per share, which will be a discount of 5% to the floor price of ₹105.42 and around 9% discount to Tuesday's closing price of ₹110.20.

CNBC-TV18 had on Monday reported that the QIP will be in the range of ₹3,500-4,000 crore, consisting of a base issue in the range of ₹2,000-2,500 crore, with an additional greenshoe option of ₹2,500 crore.

Bank of India reported a 52% jump in the net profit to ₹1,458 crore in the September 2023 quarter.

So far this year, the BoI stock price has gained more than 20%.

The QIP is a method by which listed companies in India can raise capital by issuing equities or other equity-convertible securities to qualified institutional buyers. The method lets a company don't dilute its management stake and not repeat paperwork as it did during its initial public offering (IPO).