Dhanalakshmi Bank taps NRI depositors for bond issue
BS Reporter / Mumbai/Kochi Oct 06, 2009, 00:54 IST
Dhanalakshmi Bank raising Rs 150 crore through Tier-II bonds to strengthen capital hardly makes the news as banks routinely tap the market for this purpose. What perhaps sets this small south-based bank apart is the profile of investors who have subscribed to the bonds.
While banks usually target fellow banks and insurance financial institutions and occasionally provident funds, Dhanalakshmi Bank approached its own high net-worth overseas Indians who are its depositors.
The bonds carry a coupon of 10.30 per cent paid annually and have a maturity of 5 years and seven months. They are proposed to be listed at the National Stock Exchange, said its Chief Financial Officer Bipin Kabra. These bonds have been issued on a repatriable basis. Thus, currency risks associated with bonds will be borne by the investors.
The new capital will help bank tap new business opportunities, thereby acting as a catalyst for its growth plan.
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