Money & Banking

Axis Bank to raise ₹15,000 crore as capital through various instruments

?OUR BUREAU Mumbai | Updated on July 02, 2020

Private sector lender Axis Bank will raise ₹15,000 crore as capital through various instruments. The decision was taken at a meeting of the bank’s board of directors on Thursday.

“The board, at its meeting held today, has approved the proposal relating to raising of funds not exceeding ₹15,000 crore through issue of equity shares, depository receipts and, or any other instruments or securities representing either equity shares and, or convertible securities linked to equity shares, including through Qualified Institution Placement, American Depository Receipts, Global Depository Receipts programme, preferential allotment or such other permissible mode or combinations…,” it said in a regulatory filing after the meeting.

The bank’s board had, in April, approved a proposal to raise up to ₹35,000 crore.

S&P rating

The announcement comes soon after global rating agency Standard and Poor’s lowered the ratings on private sector lender on concerns that increasing economic risks will impact its asset quality.

The lender’s overall capital adequacy stood at 17.53 per cent, with healthy ratio of 13.34 per cent as of FY20-end, which is much higher than the regulatory requirements.

Axis Bank is the latest among lenders to work out capital-raising plans as it tries to enhance its buffers amid the Covid-19-led economic uncertainty. Banks have been concerned of increased stress and defaults once the six-month loan moratorium comes to an end.

ICICI Bank has raised ₹3,090 crore crore by selling stake in its general and life insurance arms. HDFC Bank plans to raise ₹50,000 crore in the next 12 months by issuing various debt securities.

YES Bank, too, is looking to raise close to ₹10,000 crore as capital, while Kotak Mahindra Bank has raised ₹7,442 crore through a qualified institutional placement of shares.

Axis Bank has also convened its annual general meeting on July 31 through video conferencing.

On Thursday, the lender’s scrip closed 2.24 per cent lower at ₹423.55 apiece on the BSE.

Published on July 02, 2020

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