IndusInd Bank to raise $1 bn through MTNs to meet its funding requirements

Private lender IndusInd Bank plans to raise up to $1 billion (about Rs 7,000 crore) through medium term notes (MTNs) to meet its funding requirements. It would also raise up to Rs 3,000 crore thro­ugh Tier I and Tier II bonds.
 
In a meeting on Wednesday, the board approved setting up of a Euro MTN (EMTN) programme of about Rs 7,000 crore. “The EMTN shall provide the bank access to foreign currency funds for meeting its funding requirements,” said the bank in a filing to the exchanges.
 
The funding would be availed through its IFSC unit in Gift City (Ahmedabad) and the EMTN programme will be listed on the Singapore stock exchange.

 
The bank also plans to raise long-term financing by issuing Basel III-compliant bonds in the nature of debentures towards non-equity regulatory additional capital (AT1 Bonds) and Unsecured Basel III-compliant bonds in the nat­ure of debentures towards non-equity regulatory Tier 2 Cap­ital (T2 Bonds) with face value of Rs 10,000 each, for cash. This fund-raising would be for an amount not exceeding Rs 3,000 crore in one or mo­re tranches, on private plac­e­ment basis, subject to approval of regulators.
 
The bank has seen a dip in its capital adequacy ratio (CAR) over the past year. The bank’s CAR as on December 2018 stood at 14.19 per cent against 15.83 per cent at the end of the year-ago December quarter.  The bank’s tier-1 ratio fell to 13.78 per cent in December 2018 from 15.33 per cent as on December 2017. The bank’s stock closed at Rs 1,498.30 on BSE, up by 0.12 per cent from previous close.