Federal Bank to raise Rs 916 cr in equity capital from IFC, affiliates

Topics Federal Bank | Equity capital | IFC

The lender is also seeking shareholders' approval for raising upto Rs 8,000 crore through tier I, tier II, and long term bonds like infrastructure and ESG bonds.
Private lender Federal Bank will raise about Rs 916 crore in equity capital by issuing shares to International Finance Corporation ( IFC) and its affiliates to strengthen capital adequacy. The transaction is subject to regulatory approvals.

The Kochi-based bank will also seek shareholders' nod to raise upto Rs 4,000 crore in equity capital through routes like rights issue, follow in public offer. It will place a proposal to this effect at the Annual General Meeting ( AGM) scheduled on July 02, 2021.

The lender is also seeking shareholders' approval for raising upto Rs 8,000 crore through tier I, tier II, and long term bonds like infrastructure and ESG bonds, the bank said in filing with BSE. Its stock was trading 1.06 per cent higher at Rs 85.5 per share on BSE.

At its board meeting held last night, the board cleared a proposal to issue 104.8 million shares (with face value of Rs 2 each) to IFC and affiliates at a price of Rs 87.39 per equity Share aggregating to Rs 916.25 crore. IFC, private sector funding arm of World Bank group, and its affiliates -- IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund, will hold about 4.97 per cent stake in the bank.

Federal Bank's capital adequacy ratio stood at 14.62 per cent with tier I of 13.85 per cent as on March 31, 2021.


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