LIC-owned IDBI Bank on February 3 said it has raised Rs 745 crore through issue of Basel III compliant tier 2 bonds which will help improve its capital position. The 10-year bond was priced at a coupon rate of 9.50 per cent per annum payable annually, the bank said in a statement.
“The amount mobilised would be counted as part of tier 2 capital and enhance the capital adequacy of the bank,” the statement said.
The bonds have a call option after five years.
The bids were opened on electronic bidding platform of BSE on January 31, and allotment to successful bidders closed on Monday.
In December, Parliament approved Rs 9,300 crore capital infusion in IDBI Bank.
The Department of Financial Services got Rs 4,557 crore for infusion into the bank through recap bonds for its share of 47.11 per cent in IDBI Bank.
State-owned LIC, which is the promoter of the debt-ridden lender with 51 per cent stake, will pump in an additional Rs 4,743 crore to improve the bank’s capital position.
Presenting the Union Budget on Saturday, Finance Minister Nirmala Sitharaman said the government’s balance holding in IDBI bank will be sold to private retail investors.Get access to India’s fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
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