Bank of India has successfully completed its Basel III compliant Tier II Bonds issue worth Rs 2,500.00 crore, receiving an overwhelming response from investors. The issue was oversubscribed by 4.98 times against the base issue size, with total bids amounting to Rs 4,982.00 crore. The bank has officially informed stock exchanges about the completion of this private placement issue.

Bond Issue Details

Investor Response and Allotment

The bond issue witnessed exceptional investor interest, reflecting strong confidence in Bank of India's creditworthiness. The bank received 68 bids totaling Rs 4,982.00 crore, significantly exceeding the base issue size of Rs 1,000.00 crore. Out of these, the bank accepted 29 bids worth Rs 2,500.00 crore at a coupon rate of 7.28%. The bonds were allotted to 14 institutional investors on a private placement basis, with the bidding process conducted through the NSE Electronic Bidding Platform.

Regulatory Compliance and Rating

The [ICRA]AA+ rating indicates very low credit risk and validates Bank of India's strong capacity to meet its financial commitments. This high credit-quality rating applies specifically to the Basel III compliant Tier II Bonds, which serve as regulatory capital instruments to enhance the bank's capital adequacy under international banking norms.

Strategic Implications

This successful bond issuance strengthens Bank of India's regulatory capital base and demonstrates the market's confidence in the bank's financial health. The Basel III compliant nature of these Tier II bonds ensures adherence to international banking regulations designed to improve the banking sector's resilience to financial stress. The overwhelming subscription response and competitive coupon rate of 7.28% reflect the bank's strong market standing and investor trust in its long-term stability. The bank has duly informed both NSE and BSE about the completion of this capital-raising exercise through official regulatory filings.

Bank of India received a comprehensive credit rating reaffirmation from CARE Ratings Limited on December 18, 2025, covering its entire portfolio of Basel-III compliant Tier II Bonds and Infrastructure Bonds worth ₹50,000 crores. The rating agency maintained an 'A+' rating with stable outlook across all bond series, reflecting confidence in the bank's financial stability and government backing.

Comprehensive Rating Portfolio

CARE Ratings' evaluation encompassed multiple bond instruments with significant aggregate value:

The rating actions included reaffirmation of six existing bond series and fresh ratings for new Tier-II bond issues and Certificate of Deposit programs, demonstrating comprehensive coverage of the bank's debt instruments.

Strong Financial Performance Metrics

Bank of India's improved financial performance underpinned the rating reaffirmation. Key performance indicators show substantial growth:

The bank's asset quality parameters also showed improvement with Gross NPA ratio declining to 3.27% in FY25 from 4.98% in FY24, while Net NPA ratio decreased to 0.82% from 1.22%.

Government Support and Market Position

CARE Ratings emphasized the bank's strong government backing, with Government of India holding 73.38% shareholding as of September 2025. The rating agency expects continued support given Bank of India's significance as the sixth-largest nationalized bank with advances of ₹6.96 lakh crores and total business of ₹15.49 lakh crores.

The bank operates through an extensive network of 5,375 branches in India and 22 overseas branches, with 65% of domestic branches serving rural and semi-urban areas, providing strong franchise value.

Rating Outlook and Sensitivities

The stable outlook reflects CARE's expectation of continued stable financial performance with gradual improvement in asset quality parameters. However, the rating agency noted potential pressure on Net Interest Margin in FY26 due to faster repricing of advances compared to deposits.

Positive rating factors include improvement in profitability with Return on Total Assets remaining above 0.8% and sustained improvement in asset quality parameters. Negative factors could include decline in profitability below 0.30% ROTA or deterioration in capitalization levels.