Equitas Small Finance Bank has successfully strengthened its capital position by raising ₹500 crore through the allotment of Tier II Non-Convertible Debentures (NCDs). This strategic move is set to enhance the bank's Tier II capital base, potentially improving its overall financial stability and lending capacity.

Key Details of the NCD Issuance

The bank has allotted 50,000 Rated, Listed, Unsecured, Subordinated, Redeemable, Transferable, Fully Paid Up Lower Tier II Bonds in the nature of Non-Convertible Debentures. Here are the essential details of the issuance:

Terms and Structure

The NCDs come with the following terms:

• Interest Payment: Annual payments on July 31st each year
• Redemption: Bullet payment at par on maturity
• Security: Unsecured
• Special Rights: No special rights or privileges attached to the instrument

Significance for Equitas Small Finance Bank

This capital raising exercise is a significant move for Equitas Small Finance Bank, as it:

1. Strengthens the bank's Tier II capital base
2. Potentially enhances the bank's ability to expand its lending activities
3. Demonstrates investor confidence in the bank's financial health and future prospects

Regulatory Compliance

The NCD issuance has been conducted in compliance with the Securities and Exchange Board of India (SEBI) regulations. The bank has made the necessary disclosures under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This successful fundraising effort underscores Equitas Small Finance Bank's proactive approach to capital management and its commitment to maintaining a strong financial foundation to support its growth objectives in the competitive banking sector.

Equitas Small Finance Bank has successfully raised Rs 500.00 crore through the allotment of non-convertible debentures (NCDs) on July 31, 2025. The bank issued 50,000 rated, listed, unsecured, subordinated, redeemable Lower Tier II bonds through private placement, each with a face value of Rs 1.00 lakh.

Key Details of the NCD Issue

Terms and Conditions

The NCDs, classified as Lower Tier II bonds, come with a coupon rate of 9.60% per annum. Interest payments will be made annually, with the first payment due on July 31, 2026. The bonds have a five-year tenure, set to mature on July 31, 2030.

Redemption and Security

At maturity, the debentures will be redeemed at par value of Rs 1.00 lakh per unit, along with any accrued interest. It's important to note that these bonds are unsecured, meaning they are not backed by any specific assets of the bank.

Regulatory Compliance

The allotment of these NCDs is in compliance with the Securities and Exchange Board of India (SEBI) regulations. Equitas Small Finance Bank has made the necessary disclosures under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Impact and Outlook

This successful NCD issue demonstrates Equitas Small Finance Bank's ability to raise capital through debt instruments. The funds raised are likely to strengthen the bank's Tier II capital base, potentially supporting its growth and expansion plans. However, investors and stakeholders should note that as these are unsecured bonds, they carry a higher risk compared to secured debt instruments.

The bank's decision to issue these bonds with a relatively high coupon rate of 9.60% may reflect current market conditions and the bank's strategy to attract investors. As always, potential investors should carefully consider the risks and rewards associated with such investments.

Equitas Small Finance Bank continues to navigate the competitive banking landscape, and this capital raise could play a crucial role in its future strategic initiatives.