AU Small Finance Bank has successfully raised ₹770 crore through the sale of tier-II bonds, with an annual coupon of 9.20%. The funding, which saw investments from reputable entities such as HDFC Bank, Nippon India Mutual Fund, insurance companies, and pension funds, is expected to boost the bank’s capital adequacy ratio by approximately 1% to 19.9%.
The proceeds from the bond issue will be used to fuel the bank’s future growth, enabling the bank to extend its digitally powered banking products and services across the country. According to AU Bank’s managing director, Sanjay Agarwal, the fundraising will be instrumental in boosting the bank’s growth trajectory and supporting its expansion plans.
As of the third quarter, the bank’s total loan portfolio stood at ₹1.09 lakh crore, while its deposit base stood at ₹1.12 lakh crore. The successful bond issuance is a testament to the bank’s financial stability and its ability to attract reputable investors.
The injection of funds is expected to have a positive impact on the bank’s operations, enabling it to expand its offerings, improve its services, and increase its geographical footprint. The bank’s commitment to leveraging technology to drive its business is also likely to receive a boost, as it looks to further digitize its operations and offerings.
Overall, AU Small Finance Bank’s successful bond issuance is a significant milestone in its growth journey, and the bank is well-positioned to continue its rapid expansion and growth.