Axis Bank to raise Rs 12,000 crore through Tier II bonds; details here

Axis Bank has announced that it is going to raise funds amounting to Rs 12,000 crore via Tier II bonds. The bank stated in its regulatory filing that it is proposing to raise funds by issuing listed, rated, unsecured, taxable, subordinated, non-convertible Basel III compliant Tier II bonds amounting to a total issue size of up to Rs 12,000 crore. The offer contains a base issue of up to 1,000 bonds worth Rs 1,000 crore with a green shoe option for retaining oversubscription of up to 11,000 Bonds amounting to Rs 11,000 crore, as per the bank. Aix Bank is not the only lender to have considered this option. The State Bank of India (SBI) sold 10-year infrastructure bonds worth Rs 10,000 crore earlier this month at a coupon of 7.51 per cent

In April, Axis Bank had said that its board approved a proposal to raise capital up to Rs 35,000 crore by issuing many debt instruments in one or more tranches on Indian/foreign currency in domestic/overseas markets.

The government sold its entire 1.55 per cent stake in Axis Bank last month, amounting to 46.5 million shares. The floor price of the sale was set at Rs 830.63 per equity.

The net interest income (NII) of the bank grew by 31 per cent year-on-year (YoY) to Rs 10,360 crore from Rs 7,901 crore in the last year quarter. The asset quality of the lender improved during the reporting quarter. The gross non-performing asset ratio fell to 2.5 per cent as on 30 September 2022 from 2.76 per cent the previous quarter and 3.53 per cent a year ago. Axis Bank saw a consolidated net profit of Rs 5,330 crore, an increase of 70 per cent, for the quarter that ended September 2022 against Rs 3,133 crore in the year-ago quarter.

Recently, Rs 348 crore was raised by the Bank of Maharashtra via Basel-III Tier-II bonds with a maturity period of 10 years at an 8 per cent coupon rate. The bonds contain a call option of five years. A call option in bonds provides the issuer with the option to call back the bond before its maturity by paying back the principal amount.

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