IDFC First Bank raises Rs 1,500 cr via tier-II bonds, CAR to rise to 16.5%

LIC corners 60% of maiden issue

Private sector lender IDFC First Bank has raised Rs 1,500 crore in capital through maiden issue of tier-II bonds to bolster capital profile and support business growth.

The initial issue size was of Rs 1,000 Crore with a green shoe option of up to Rs 500 crore. The subscription participation to bonds placed privately came from domestic investors including Life Insurance Corporation of India which subscribed to more than 60 per cent of the issue size, bank said in a statement.

Sudhanshu Jain, CFO and Head–Corporate Center, IDFC First Bank, said the issue was oversubscribed to the maximum level by the marquee domestic investors including LIC. This showcases the strong interest for our 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). Bank sees strong credit demand in business lines and such capital will help to boost our overall growth prospects, he added.

Its capital Adequacy Ratio (CAR) stood at 15.38 per cent with Common Equity Ratio of 14.83 per cent in December 2021. Private bank's assets grew by 11 per cent Year on Year (YoY) to reach Rs 1,22,219 crore by end of December 2021. The retail Loan and Commercial finance grew by 26 per cent YoY to reach Rs 86,052 crore.

These bonds shall be redeemed in accordance with the terms of issue on its original 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, and subject to fulfilment of extant regulatory provisions.