AU Small Finance Bank raises ₹2,500 crore

AU Small Finance Bank Ltd. (AU Bank) has announced the successful completion of a total capital raise of ₹2,500 crore comprising Tier I capital of ₹2,000 crore and Tier II capital of ₹500 crore by issuing 10-year subordinated bonds.

This takes the bank’s overall capital adequacy ratio (CRAR) from 19.4% to 25.7% (as on June 30, 2022 on a pro-forma basis). The fresh capital will be used to support the bank’s growth plans over the medium term, and will help maintain sufficient headroom over and above the regulatory capital adequacy requirements, the bank said in a statement.

The QIP issue opened on August 3, 2022, at a price band of ₹570-590 per share, and witnessed demand from both foreign institutional investors (FII) and domestic institutional investors (DII). The QIP issue was oversubscribed 4 times with bids crossing $1.01 billion. The Capital Raising Committee (CRC) of the bank fixed the issue price at ₹580 per share.

AU Bank also raised Tier II capital of ₹500 crore via private placement of unsecured, subordinated, rated, listed, redeemable, non-convertible lower Tier II bonds in the form of non-convertible debentures (NCD).   

Sanjay Agarwal, MD & CEO, AU Small Finance Bank said, “Our objective remains to build a best-in-class tech-led retail bank in India with a very sustainable business model and the fresh capital will significantly help us in that journey.”

“With a post-issue CRAR of over 25% (pro-forma basis) coupled with sustained demand from the segments we cater to, and stable asset quality, we are well positioned to grow and take advantage of the tremendous opportunity that market provides us with,” he added.

Our code of editorial values

  1. Comments will be moderated by The Hindu editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.

Printable version | Aug 10, 2022 8:41:56 pm |