State-owned Bank of Baroda (BoB) plans to raise Rs 11,900 crore during the current fiscal through share sale, including Employee Share Purchase Scheme to shore up capital for meeting business expansion requirement. The bank expects to garner Rs 1,500 crore from Bank of Baroda Employee Share Purchase Scheme (BoB-ESPS).
It has been decided to raise size of ESPS scheme to 15 crore shares with a face value of Rs 2 each as against 10 crore shares proposed in January this year. ESPS will be within overall limit of capital plan 2019-20 of Rs 11,900 crore of the bank, BoB said in its Annual General Meeting (AGM) notice to its shareholders.
The remaining capital would be raised by way of various modes such as Qualified Institutional Placement (QIP) or Follow on Public Offer (FPO) or rights issues or any other mode or combinations of these with the existing paid-up equity share capital remaining within the total authorized capital of the bank of Rs 3,000 crore, it said.
The decisions in this regard will be taken by shareholders of the bank on June 21 at the AGM. The size of ESPS was enhanced with a view to provide an opportunity to the employees of erstwhile Dena Bank and Vijaya Bank, which were merged with BoB. It will help the bank raise equity capital to shore up capital adequacy and to fund the general business needs, it said.
Besides, it will enable the bank to attract, retain and reward employees by sharing the value created by them and motivate them to contribute to the growth and profitability of the company, it said. At the same time, the move to offer ESPS will create a sense of ownership and participation amongst the employees.
It is to be noted that the maiden three-way amalgamation became operational with the merger of Dena Bank and Vijaya Bank with BoB from April 1. With the first ever three-way merger, BoB has now become the second-largest public sector lender after the State Bank of India with over 9,500 branches, 13,400 ATMs and 85,000 employees to serve 12 crore customers. The consolidated entity started the operation with a business mix of over Rs 15 lakh crore on the balance sheet, with deposits and advances of Rs 8.75 lakh crore and Rs 6.25 lakh crore, respectively.