IDFC First Bank raises Rs 1,500 cr via tier-2 bond offering

IDFC First Bank on Tuesday said it has successfully raised Rs 1,500 crore through tier-2 bonds in the domestic Indian bond market.

The bonds, issued through private placement on the NSE e-bidding platform, are unsecured, subordinated, rated, listed, non-convertible, taxable, redeemable and fully paid-up. They are Basel III compliant and listed as non-convertible debentures with a face value of Rs 1 crore each.

"These bonds have received favourable ratings with CRISIL, assigning them of rating of AA+/Stable and India Ratings & Research giving them a rating of IND AA+/Stable," said the lender.

Notably, IDFC FIRST Bank’s tier-2 bond ratings were upgraded by CRISIL Ratings Limited in June 2023 from AA/Positive to AA+/Stable.

The issuance attracted participation from domestic qualified institutional investors, including corporates, public pension funds, provident funds and insurance companies.

The NSE e-bidding platform witnessed strong interest, resulting in over subscription of the issue.

The tier-2 bonds have a tenor of 10 years and offer a coupon rate of 8.40%. They also include a call option at the end of five years.

With the capital raise, IDFC First Bank’s capital adequacy, calculated based on the financials as of March 31, 2023, will reach 17.68%.

This increased capital will provide the bank with greater flexibility for its growth prospects, it said.

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