IDBI Bank plans to meet its capital requirements over the next three years by raising ₹19,000-20,000 crore via the equity route, about ₹13,000 crore through issue of Tier I/II bonds, and by monetising its non-core assets, according to Kishor Kharat MD & CEO. The bank, he said, is also open to selling the stake it holds in the NSE.
“Most of the non-core assets, which are not giving any value addition to us, will be monetised in the next three years. Everyone knows that the NSE is a low-hanging fruit. I can dilute that also,” Kharat said at a press conference while outlining the various methods that the bank would employ to raise more capital.
Without divulging the details of the divestment, Kharat said the bank would raise ₹1,200-1,500 crore through this route this month. NSE, NSDL, SIDBI, ARCIL, Care Ratings and NEDFI are some of IDBI Bank’s prominent investments, Kharat observed.
The bank’s plan to raise a total of ₹6,000 crore this fiscal is still on and any gap would be made up through monetisation, Kharat added.
The bank is embarking on a road show in a week’s time to solicit investors for its additional Tier-I capital-raising — this is likely to bring in about 2 per cent of its capital requirements.
For achieving a CRAR of 16 per cent by FY19, IDBI Bank is planning to raise ₹19,000-20,000 crore of equity through the QIP/FPO/preferential allotment routes over the next three years.
“Capital from Tier-I bonds worth ₹4,000 crore and Tier-II bonds of ₹8,000-9,000 crore during the period from domestic and overseas markets will give the bank a CRAR of 16 per cent, common equity Tier-I of 8 per cent and a counter-cyclical buffer of 2.5 per cent,” said the bank’s Chief Financial Officer, NS Venkatesh.
On February 20, the bank’s board approved the raising of ₹1,500 crore from LIC through the preferential allotment route.
This fund-raising is subject to shareholder and government approvals. The bank has convened an EGM for this purpose on March 22, besides providing the facility of electronic voting to its shareholders on this special resolution during March 18-21.