After recently venturing into mutual funds, Axis Bank on Monday announced that it plans to setting up a non-banking financial company (NBFC) to fund infrastructure activities.
The move has been approved by the bank's board and the lender will now seek approval of the Reserve Bank of India (RBI). Somnath Sengupta, executive director and chief financial officer of Axis Bank, said the NBFC would be a wholly-owned subsidiary of the bank and hoped to begin operations next year. The NBFC will finance diverse activities in the infrastructure space such as roads and power projects.
The lender recently raised Rs 3,450 crore of equity capital through a Global Depository Receipt (GDR) and Qualified Institutional Placement (QIP) issue as well as Rs 444 crore through a preferential issue of shares to its promoters.
It is expected that a part of this capital will be used to fund new businesses.
The bank's asset management company started operations last month and has already launched four products.
The bank also has an private equity arm, Axis Private Equity, which has raised an infrastructure fund with a corpus of $150 million. It plans to expand this fund by $250 million over the next six-nine months.
The bank is also mulling an entry into the health insurance space.
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