IndusInd Bank to raise capital through Rs 1,000 crore AT1 bonds

Private sector lender IndusInd Bank plans to raise Rs 1,000 crore through additional tier I bonds to bolster capital adequacy for business growth.

Bank’s absolute net worth increased to Rs 19,883 crore as on December 31, 2016, from Rs 17,696 crore as on March 31, 2016. Tier-I and overall capital adequacy ratios were healthy at 14.74 per cent and 15.31 per cent, respectively, as on December 31, 2016.

Rating agency CRISIL has assigned “AA” Stable' rating for proposed bond offering by private bank. Rating agency also reaffirmed existing ratings on the other debt instruments. The ratings continue to reflect strong capitalisation, healthy asset quality, and a comfortable earnings profile.

Capitalisation is further supported by a demonstrated ability to raise capital on a regular basis and comfortable accretion to net worth. The bank has raised equity capital on several occasions over the past few years to support its strong growth plans.

It raised equity capital of about Rs 5,100 crore in fiscal 2016 through qualified institutional placement. Capitalisation is likely to remain strong on account of the ability to raise capital on an ongoing basis, and will support credit growth and cover asset-side risks over the medium term, CRISIL said.

As on December 31, 2016, IndusInd had an asset base of about Rs 1,67,102 crore, deposit base of Rs 1,19,218 crore, and total advances of Rs 1,02,770 crores.

In the nine months ended December 31, 2016, profit after tax (PAT) was Rs 2,116.3 crore on total income (net of interest expenses) of Rs 7,355.34 crore, as against PAT of Rs 1666.1 crore on total income (net of interest expense) of Rs 5632.51 crore in the corresponding period of the previous financial year.