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Bank of India Share Price Surges Over 2% Post Plans to Raise ₹5,000 Crore via Infra Bonds

Updated on: Dec 4, 2024, 10:38 PM IST
Bank of India shares climbed 2.39% to ₹116.74 after revealing plans to raise ₹5,000 crore through infrastructure bonds to support growth.
Bank of India Share Price Surges Over 2% Post Plans to Raise ₹5,000 Crore via Infra Bonds
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As of December 4, 2024, Bank of India share price is trading at ₹116.74, reflecting an intraday gain of ₹2.72 or 2.39%. The stock opened at ₹114.60, reached a high of ₹118.18, and a low of ₹114.26 during the trading session. 

Stock Performance

Over the past month, the stock has gained ₹8.41, a rise of 7.76%. On a yearly basis, it has appreciated by ₹7.46, marking a growth of 6.83%. The stock’s 52-week high is ₹157.95, while its 52-week low is ₹96.00.

The surge came after the Bank of India (BoI), a public sector bank, announced that it is preparing to raise an additional ₹5,000 crore through infrastructure bonds. This move comes after BoI successfully raised ₹5,000 crore in late November through a 10-year infrastructure bond with a 7.41% coupon rate.

Earlier, in July, BOI raised a similar amount via another 10-year infrastructure bond, though the coupon rate was slightly higher at 7.54%. With these 2 issuances, the bank has already raised ₹10,000 crore. The bank is currently discussing the additional ₹5,000 crore and will seek board approval based on market liquidity and pricing trends.

These bonds are particularly attractive for banks since they are exempt from regulatory reserve requirements like the statutory liquidity ratio (SLR) and cash reserve ratio (CRR).

High Demand for Long-Tenor Bonds

Institutional investors have shown significant interest in long-term bonds issued by government banks, despite tight liquidity in the banking sector. Prominent public sector banks, including State Bank of India, Bank of Baroda, Canara Bank, Bank of Maharashtra, and Indian Bank, have also raised substantial funds through infrastructure bonds this year.

Brand Building and Marketing Plans

In addition to fundraising, BOI is working on improving its brand image. The bank is seeking advisory services to assess its brand recall and outdoor advertising activities. A Request for Proposal (RFP) has been issued to explore these strategies.

The bank is also considering appointing a brand ambassador to enhance its visibility and customer engagement. This idea is still in the initial stages, with discussions about how marketing efforts can positively impact business performance.

Inspiration from Industry Leaders

Other public sector banks have already adopted similar strategies. Last year, the State Bank of India roped in MS Dhoni as its brand ambassador to connect with younger audiences. Recently, in October, the Bank of Baroda signed a 3-year deal with cricket legend Sachin Tendulkar as its Global Brand Ambassador. Bank of India’s efforts aim to modernise its image and strengthen its market presence.

 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

Published on: Dec 4, 2024, 12:33 PM IST

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