Government of India(GOI), the major stake holder in Bank of India (BOI) has increased its capital base by Rs.1000 crore, and the mode of capital infusion could be, through preferential allotment of shares. After pref allotment, GoI’s stake in the bank will go from the existing 65.86% to around 67.8%. BoI’s capital adequacy ratio too would reach 13% as against the existing 11.97%.
Rh Views: The bank’s asset quality remains a concern among market participants. It has an exposure of around Rs 550 crore to the debt-ridden Kingfisher airlines and the bank is in talks with company for restructuring of loans. while the credit extended to state electricity boards (SEBs) stands at Rs 6,500 crore and it does not show any sign of stress as per the management. We recommend to buy at the levels of Rs. 320-325 levels.
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