ICICI Bank on Wednesday said the board has approved raising up to R50,000 crore through private placement of bonds, non-convertible debentures (NCDs) and other securities. In a regulatory filing to NSE, the bank said the securities will be priced up to 300 basis points (bps) above the prevailing rupee sovereign bond rate.
The bank lowered the borrowing limit for FY16 to R50,000 crore from R1 lakh crore in the last fiscal after assessing the fund requirement. It had already raised R6,850 crore through NCDs on private placement since last AGM till March 2015.
Other banks, too, are planning to raise funds via equity or bond route. State Bank of India (SBI) plans to raise R15,000 crore through equity offering and Yes Bank plans to raise R16,000 crore through equity and bonds.
Earlier in July, the bank had raised R500 crore through 7-year infrastructure bonds with a green shoe option of R500 crore at a coupon rate of 9.75%.
Managing director and chief executive officer Chanda Kochhar had said that infrastructure bonds would play an important role in the funding structure of the bank as they have been large players in financing infrastructure and housing.
In July 2014, Andhra Bank’s R1,000-crore issue was rated AA+ by ratings agency Crisil, making it the first long-term infrastructure bond to the rated. Kotak Mahindra Bank’s R300-crore issue was rated AAA by Crisil earlier in August.
In February this year, HDFC Bank had concluded a R10,000-crore private placement to institutional investors in the US and India. The bank raised close to $1.3 billion (R8,000 crore) by way of American Depositary Receipts (ADR) based on the current exchange rate. Additionally, the bank had raised close to R2,000 crore by way of qualified institutional placement (QIP) from domestic institutions.
ICICI Bank had reported a net profit of R2,922 crore in Q4 FY15, an increase of 10% year-on-year, slowest quarterly growth in five years. The bank’s net profit growth was largely aided by non-interest income, which was up 17.47% y-o-y in Q4 to R3,496 crore. Its capital adequacy ratio under Basel III stood at 17.02%.
The bank’s corporate credit grew at 10% on an annualised basis but retail assets, which constituted 42% of its loan portfolio as on March 31, saw a 25% y-o-y growth. This took its growth in domestic advances to 18% compared to the same period last year.