IDFC First Bank has raised Rs 1,500 crore through private placement of unsecured, subordinated, rated, listed, non-convertible, fully paid-up, taxable, redeemable Basel III compliant tier-2 bonds (in the nature of debentures) at a face value of Rs 1 crore each, the bank said in a release.
The subscription participation came from marquee domestic investors including Life Insurance Corporation of India (LIC), which subscribed to more than 60 per cent of the issue size, the bank said. The lender did not name the other investors subscribing to the issue.
The bonds carry maturity of 10 years, however, a call option may be exercised at the sole discretion of the bank after completion of 5 years from the date of allotment and yearly thereafter, the lender said.
Sudhanshu Jain, CFO and Head – Corporate Center, IDFC First Bank said: “This is the maiden tier-2 issuance of bonds by the bank since its inception. The initial issue size was of Rs 1,000 crore with a green-shoe option to retain oversubscription up to Rs 500 crore.”
He said the interest shown by the investors, including LIC, showcases the strong interest for bank’s paper in the market.
“With this tier-2 capital raise, the capital adequacy would be enhanced to 16.5 per cent (calculated on the financials as of December 31, 2021). We see strong credit demand in our business lines and such capital will help to boost our overall growth prospects,” Jain said.