IDBI Bank board approves proposal to raise up to Rs 3,000 crore via AT1 bonds
By issuing equity shares to 44 qualified institutional investors at a floor price of Rs 40.63 apiece, IDBI Bank raised Rs 1,435 crore in December out of the targeted Rs 2,000 crore.
March 27, 2021 / 04:12 PM IST
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The board of directors of IDBI Bank on March 26 approved borrowing up to Rs 8,000 crore through rupee-denominated bonds in one or two tranches for FY 2021-22.
The lender said it will borrow up to Rs 3,000 crore via additional tier-I (AT1) bonds in one or more tranches, while up to Rs 1,000 crore in senior/infrastructure bonds by way of private placement.
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"In continuation of our earlier disclosure dated March 23, 2021, it is hereby informed that the Board of Directors, at its meeting held on Friday, March 26, 2021, has approved Rupee Bond Borrowing limit of Rs 8,000 Crore, to be borrowed in one or more tranches during the FY 2021-22. Within the above overall limit of Rs 8,000 crore, Additional Tier 1 (AT1) Bonds and Senior/Infrastructure Bonds may be issued up to Rs 3,000 crore and 1,000 crore, respectively by way of private placement during FY 202 1-22," IDBI said in a regulatory filing.
Market regulator Securities and Exchange Board of India (Sebi) in its circular last week had capped mutual fund (MF) investment in bonds with special features to 10 percent of scheme assets and 5 percent for a single issuer. The regulator also mandated AT1 bonds to be valued as if they have a maturity of 100 years. However, Sebi allowed fund managers to consider these AT1 bonds as 10-year paper for FY22 to soften the blow for investors.
With the help of issue of equity shares to 44 qualified institutional investors at a floor price of Rs 40.63 apiece, IDBI Bank raised Rs 1,435 crore in December out of the targeted Rs 2,000 crore.