Bank of India Announces Redemption of Basel III-Compliant Tier 2 Bond Worth Rs 3000 Crore

Bank of India (BOI) has declared the redemption of its Basel III-compliant Tier 2 bond, identified by ISIN: INE084A08060. This bond, valued at Rs 3,000 crore, is set to mature on December 31, 2025. The bank has designated December 16, 2025, as the record date to identify eligible bondholders in line with SEBI regulations.

In a recent stock exchange filing, BOI stated, "The trading in the above-mentioned bond will be suspended between the Record Date and the Redemption Date. Upon payment of broken period interest and bond principal amount by the Bank on its due date to the holders of the Bond as on the Record Date, the Bank's liability to the Bondholders towards all their rights including for the payment or otherwise shall cease and stand extinguished."

Last month, BOI revealed that ICRA Ltd. assigned a [ICRA] AA+ (Stable) rating to its newly issued Basel-III compliant Tier II bonds worth Rs 2,500 crore. ICRA also reaffirmed and later withdrew its rating for BOI's fixed deposit program due to no deposits being mobilised under this rating.

ICRA highlighted BOI's robust capital position and improving solvency levels. The bank's asset quality has seen improvement with Gross Non-Performing Assets (GNPA) dropping to 2.54% and Net Non-Performing Assets (NNPA) reducing to 0.65% as of September 30, 2025. However, ICRA noted that the vulnerable book remains a factor to monitor.

BOI's profitability has been on an upward trajectory, with an annualised Return on Assets (RoA) of 0.91% in H1 FY2026. This improvement is attributed to better operating performance. The bank maintains high liquidity with a Liquidity Coverage Ratio (LCR) of 119.76% and a Net Stable Funding Ratio (NSFR) of 113.88%, both exceeding regulatory requirements.

ICRA warns that any decline in asset quality, solvency, or sovereign ownership could negatively impact ratings. Conversely, significant growth and improved profitability would be key for an upward rating movement.

Market Position and Ownership

As of September 30, 2025, BOI had a market share of 3.6% in total advances and 3.7% in deposits within India's banking sector. The Government of India held a majority stake of 73.38% in BOI at this time.

The bank reported a net profit of Rs. 4,807 crore in H1 FY2026 on a total asset base of Rs. 10.69 lakh crore as of September 30, 2025. This is an increase from a net profit of Rs. 4,076 crore in H1 FY2025 on an asset base of Rs. 9.78 lakh crore as of September 30, 2024.

Technical Analysis Insights

Riyank Arora, a technical analyst at Mehta Equities Ltd., commented on BOI's stock performance: "BOI is sustaining above key moving averages and forming a steady higher-low structure, indicating continued bullish sentiment. The ₹142-145 zone acts as strong support, where buyers consistently step in. Momentum is stable, and a close above ₹150 can trigger fresh upside. If sustained, the rally may extend towards ₹155-158. Trend remains positive unless ₹142 breaks."

Founded in 1906 and nationalised in July 1969 along with other banks, BOI has grown significantly over the years with an extensive network of 5,399 branches across India.