New Delhi: ICICI Bank, India’s largest private sector lender, is looking at raising Rs 50,000 crore through private placement of securities including bonds and non-convertible debentures (NCDs). The amount is half of what the bank had planned to raise earlier.
“The bank has assessed its fund requirements and it is proposed that the borrowing limits… by way of securities including but not limited to bonds and NCDs be fixed at Rs 50,000 crore, a reduction from the limit of Rs 1,00,000 crore approved at the last Annual General Meeting (AGM),” said the bank in the AGM notice sent to the exchanges.
The bank will be seeking the shareholders’ nod for its fund-raising plans at the AGM, which is to be held on June 29.
ICICI Bank also said it would issue securities including bonds and NCDs through a private placement at coupon rate up to 300 basis points above the prevailing yields for risk-free instruments on rupee government bonds of similar maturity.
The bank has already borrowed Rs 6,850 crore by issue of NCDs on a private placement basis since the earlier AGM.
The fund-raising plans come at a time when bond yields are rising and, hence, issuers are postponing their borrowing plans. The yield on the 10-year benchmark bond has climbed up by more than 20 basis points since the start of this month. As a result, the cost of borrowing is high even for high-rated issuers such as ICICI Bank.
Bond yields have been rising, tracking a rise in global yields.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.