IDFC First Bank planning to raise Rs 3,000 crore in debt capital through Tier-ii bonds

This fundraiser is aimed at bolstering the bank's business expansion efforts.

The bank has recently secured an additional rating of Rs 3,000 crore from CRISIL for its Tier-II bonds, the Business Standard report said.

However, it's important to note that this rating is primarily a preparatory step for potential Tier-II capital raising in the future, subject to growth prospects.

At present, there are no immediate plans for such a move, as the bank's capital adequacy stands at a robust level.

CRISIL has given an "AA+/Stable" to the proposed Tier-II Basel III compliant bond offering, and has reconfirmed this rating for the bank's other debt instruments.

In June 2023, the Mumbai-based private bank raised Rs 1,500 crore by issuing Tier-II bonds, with a maturity period of 10 years, a call option at the five-year mark, and carrying an interest rate of 8.4 percent.

Just recently, IDFC First Bank successfully raised Rs 3,000 crore in equity capital from institutional investors through a Qualified Institutional Placement (QIP).

This included the issuance of 330.40 million equity shares, each with a face value of Rs 10, at a price of Rs 90.25 per share. This figure included a premium of Rs 80.25 per equity share. The offering was open from October 3 to October 6, as per the filing with the BSE.

After the fresh capital raise, the bank's standalone capital adequacy ratio, based on the financials of June 30, would increase to 18.56 percent, the bank said in a statement.