Bank of Baroda , India's second-largest public sector lender, is preparing to raise approximately $500 million through US dollar bonds as part of its comprehensive offshore funding strategy. The proposed issuance falls under the bank's existing $4 billion medium-term note programme, positioning the lender to access international capital markets.

Bond Issuance Structure and Process

The bank has invited bids to appoint joint lead managers for the proposed standalone Reg-S bond issue, which may be executed in one or more tranches depending on prevailing market conditions. Reg-S allows issuers to sell bonds to non-US investors, primarily in Europe and Asia, without registering the offering in the United States.

The appointed joint lead managers will be responsible for structuring, marketing, bookbuilding and pricing of the deal. While the tenure, coupon and final pricing will be determined closer to the launch, the proposed issuance is expected to be fully underwritten by the lead managers.

Timeline and Operational Details

Bank of Baroda has established a clear timeline for the selection process, with specific deadlines for bid submissions and evaluations. The bank is currently updating its medium-term note programme based on its December 2025 financials, which serves as a prerequisite for proceeding with the offshore bond sale.

As part of the mandate, joint lead managers will coordinate with international and domestic legal counsels and ratings companies, manage roadshows and investor meetings, and oversee the listing of bonds on recognized overseas exchanges such as the Singapore Exchange or GIFT City.

Market Context and Funding Strategy

Proceeds from the bond sale are likely to be used for general corporate purposes, including funding overseas operations and refinancing existing liabilities, in line with Bank of Baroda's broader foreign currency funding strategy. Indian lenders increasingly turn to offshore bond markets to diversify funding sources, particularly amid tightening domestic liquidity conditions and rising credit demand.

In the first half of FY26, Indian companies raised $18.49 billion in external commercial borrowings (ECBs), lower than $25.42 billion in the same period in FY26, according to Reserve Bank of India data. Notable borrowings included:

• Tata Capital: $400 million in January
• Mumbai International Airport Ltd: $800 million in June
• Sammaan Capital: $300 million in August

Industry Perspective and Market Dynamics

According to Anil Gupta, senior vice president and co-group head for financial sector ratings at Icra, banks typically explore overseas funding opportunities when domestic liquidity conditions tighten. "Generally, when liquidity is tight in the domestic market, it opens a window for Indian banks to raise funds through bonds and lend via ECBs to Indian corporates," Gupta explained.

The ECB market has faced challenges due to the rupee weakening by over 6% against the dollar, driven by strong demand for the US currency, foreign portfolio outflows, and US tariffs on Indian goods. The domestic currency recently hit an all-time low of 91.7450 against the dollar due to steep demand from importers and foreign portfolio investors.

Despite these challenges, companies seeking three to five-year funding often prefer the ECB market over local alternatives, though steep hedging rates due to rupee depreciation present ongoing concerns for borrowers considering overseas funding options.

Bank of Baroda has officially informed stock exchanges about an impending strike notice from the United Forum of Bank Unions (U.F.B.U.) scheduled for January 27, 2026. The notification, issued on January 23, 2026, was sent to both BSE and NSE under the mandatory disclosure requirements of SEBI regulations.

Strike Notice Details

The United Forum of Bank Unions has served formal notice of their decision to proceed with a strike on Tuesday, January 27, 2026, citing various issues and demands. The union's strike call affects multiple banking operations across the country.

Bank's Preparatory Measures

Bank of Baroda has indicated that it is taking comprehensive steps to ensure minimal disruption to customer services. The bank's management is implementing necessary measures to maintain smooth functioning of branches and offices during the strike period.

However, the bank has cautioned that if the strike materializes as planned, there may be some impact on the normal functioning of branches and offices across its network. This transparent disclosure allows customers and stakeholders to plan accordingly for any potential service disruptions.

Regulatory Compliance

The notification was issued in strict compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically under Regulation 30. This regulation mandates listed companies to disclose material events that could impact their operations or stakeholder interests.

The formal communication was signed by S Balakumar, Company Secretary, and digitally authenticated on January 23, 2026. Both major stock exchanges - BSE (Code: 532134) and NSE (Code: BANKBARODA) - received identical notifications to ensure comprehensive market disclosure.