IDFC FIRST Bank raises Rs 1,500 cr via private placement of Tier-2 bonds

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IDFC First Bank on Tuesday said that it has raised Rs 1,500 crore through private placement of Tier-2 bonds.

The lender issued ‘Unsecured, Subordinated, Rated, Listed, Non-Convertible, Fully Paid-Up, Taxable, Redeemable Basel III Compliant Tier 2 Bonds’ for a face value of Rs 1 crore each and said that 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 by the lender after completion of five years from “the date of allotment and yearly thereafter, and subject to fulfilment of extant regulatory provisions”.

It said the subscription participation came from marquee domestic investors including Life Insurance Corporation of India which subscribed to more than 60 per cent of the issue size.

“The initial issue size was of Rs 1,000 crore with a Green Shoe Option to retain oversubscription up to Rs 500 Crore. I’m happy to say that the issue was oversubscribed to the maximum level by the marquee domestic investors… this showcases the strong interest for our paper in the market,” said Sudhanshu Jain, CFO and Head, Corporate Centre.

“With this Tier-2 capital raise, the capital adequacy would be enhanced to 16.5 per cent. We see strong credit demand in our business lines and such capital will help to boost our overall growth prospects.”

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