The share price of a banking company appreciated to the tune of 4.10 percent on Thursday’s early trades to reach an intraday high of ₹ 107.80 apiece on the National Stock Exchange (NSE). This happened after it announced that it had raised ₹ 2,000 crores. 

Bank of India is an Indian public sector bank with over 5105 branches in India, including specialised branches. Its segments include treasury operations, wholesale banking and retail banking. 

The bank informed the exchanges that it has come out with an issue of Basel III Compliant Tier II Bonds amounting to ₹ 2,000 Crore (including a base size of ₹ 1,000 Crore and Green Shoe option of ₹ 1,000 Crore). It received total bids of ₹ 3,770 Crore, indicating an overwhelming response from investors and the issue was oversubscribed by 3.77 times against the base issue size. It added that it has decided to accept bids of ₹ 2,000 crores at a coupon rate of 7.88 percent 

Bank of India’s share price increased from ₹ 53.05 to ₹ 107.80 apiece in the past year, to deliver multibagger returns of 103.20 percent. Therefore, an investment of ₹ 1 lakh in the company’s shares a year ago, would have been worth ₹ 2.03 lakhs today! 

With a market capitalization of ₹ 42,524 crores, Bank of India is a mid-cap company. It has a low return on equity of 1.17 percent and a dividend yield of 1.93 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 8.97, which is lower than the industry P/E of 14.42, indicating that the stock might be undervalued as compared to its peers. 

The company’s promoters hold an 81.41 percent stake in the company, followed by domestic institutions with 8.52 percent, retail investors with 6.45 percent, foreign institutions with 2.25 percent and mutual funds with 1.37 percent. 

Written by Simran Bafna 


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