June 27, 2023: IDFC FIRST Bank made a significant announcement today, revealing the successful raising of INR 1,500 crore through the issuance of Tier-2 bonds in the domestic Indian Bond markets. The privately placed bonds, which are unsecured, subordinated, and fully paid-up, were listed on the NSE E-bidding platform. These Basel III compliant tier-2 bonds, with a face value of INR 1 crore each, garnered tremendous interest from domestic Qualified Institutional Investors.
The bonds carry impressive ratings, with CRISIL Ratings Limited assigning them a rating of CRISIL AA+/Stable, while India Ratings & Research Private Limited rates them as IND AA+/Stable. It’s worth noting that IDFC FIRST Bank’s tier-2 bond ratings were recently upgraded by CRISIL Ratings Limited from CRISIL AA/Positive to CRISIL AA+/Stable in June 2023.
The NSE e-bidding platform witnessed robust participation from various esteemed entities, including Corporates, Public Pension Funds, Provident Funds, and insurance companies, resulting in oversubscription of the offering. These non-convertible bonds, with a tenor of 10 years and a call option at the end of five years, carry a coupon rate of 8.40%.
This successful capital raise further strengthens the capital adequacy of IDFC FIRST Bank, boosting it to 17.68% based on the financials computed as of March 31, 2023. With enhanced capital reserves, the bank is poised to seize growth opportunities and expand its operations.