Axis Bank has raised ₹12,000 crore at a coupon rate of 7.88 per cent by issuing Basel III compliant Tier II bonds of 10 years maturity on a private placement basis.
The bank’s Committee of Whole-time Directors on Tuesday approved the allotment of 12,000 unsecured, rated, listed, subordinated, taxable, non-convertible, Basel III compliant Tier II bonds (Series – 30) of ₹1 crore face value each for cash.
As per the bank’s regulatory filing, the bonds (non-convertible debentures) are proposed to be listed on the NSE and BSE.
According to ICRA, the bank’s ratings (AAA/Stable) are supported by its strong position in the Indian financial system by virtue of being the third-largest private sector bank with a 5.7 per cent share in advances and a 4.7 per cent share in the deposits of the banking system as of June 30, 2022.
Further, the overall capitalisation levels of the bank remain strong, while internal capital generation witnessed a steady improvement with the gradual decline in pressure on the asset quality and credit costs.
“Additionally, the bank continues to operate with large prudent provisions. This, coupled with the provision coverage ratio (PCR; excluding technical write-offs) of about 80 per cent as on September 30, 2022, provides sufficient cushion to absorb unforeseen asset quality shocks and to support the improvement seen in the internal capital generation,” the rating agency said in a statement.