 "Bonds")
State-owned Bank of India on Wednesday raised Rs 2,500 crore through tier-II bonds at a coupon rate of 7.49 per cent, sources aware of the development said.
“It’s a tight cutoff, but it aligns with the issuer guidance, reflecting the bullish sentiment in the markets”, the sources said, adding that the total order book for the bonds offered by the bank was about Rs 6,000 crore, reflecting good demand for such instruments among investors.
This issuance has come after the US Federal Reserve cut the policy rate by 50 basis points that set the tone for softening of yields, sources said.
Around 76 investors had put in their bids, including banks and insurance companies, they added.
The fund raised by the Mumbai based bank is for bolstering its capital adequacy. It will add about 40 basis points (bps) to its capital adequacy ratio, which will now be around 16 per cent. As of June 30, the bank’s capital adequacy stood at 16.18 per cent.
The state-owned bank is also planning to raise Rs 2,500 crore through additional tier – I bonds in the quarter ending December. Additionally, it is also planning to raise Rs 5,000 crore in infrastructure bonds. The bank had raised Rs 5,000 crore through 10-year infrastructure bonds back in July at a coupon rate of 7.54 per cent.
The coupon rate for the tier – II bond offering of Bank of India on Wednesday was well below the rate at which the state-owned bank raised funds through the same instruments, where the cut off was 7.88 per cent, the source added.
More From This Section
 "Biocon Biologics, Biocon logo")
 "Samsung")
 "Nandini Piramal, Chairperson, Piramal Pharma Ltd")
 "Realty, Real Estate")
 "Reliance Power")
Last year, the bank had raised Rs 2,000 crore in tier-II bonds at a coupon rate of 7.88 per cent, of which Rs 1,500 was for replacing the maturing bonds, and Rs 500 crore was for bolstering capital.
Earlier this month, State Bank of India raised Rs 7,500 crore at a coupon rate of 7.33 per cent through its second Basel III-compliant Tier-2 bond issuance for the current fiscal year. In the current financial year (FY25), SBI has raised Rs 15,000 crore through Basel III-compliant Tier- II bonds.
 "Fixed deposit, Finance, Savings, Personal finance")
 "Rajneesh Karnatak, MD & CEO, Bank of India")
 "Just how many self-regulatory organisations (SROs) are too many? Last week, the Reserve Bank of India (RBI) capped the number of such entities for non-banking financial companies (NBFCs) at “a maximum of two”. And to ensure the smaller NBFCs get a fa")
 "Bank of Maharashtra")
 "Bank of India, BOI")
