Equitas Small Finance Bank allots ₹500 crore LT-II NCDs at 9.95% coupon
- Allotted ₹500 crore in Lower Tier II Non-Convertible Debentures via private placement
- Coupon rate fixed at 9.95% per annum with annual interest payments
- Instruments have a 10-year tenure, maturing on September 25, 2036
- Bonds are unsecured, listed on BSE, and redeemable at par upon maturity
*this image is generated using AI for illustrative purposes only.
Equitas Small Finance Bank Limited has allotted ₹500 crore in Lower Tier II Non-Convertible Debentures (NCDs) through a private placement. The allotment, completed on September 25, 2026, strengthens the bank's capital base with long-term, subordinated debt carrying a fixed coupon of 9.95% per annum.
The issuance comprises 50,000 rated, listed, unsecured, and subordinated bonds with a face value of ₹1 lakh each. These instruments are redeemable after ten years from the deemed date of allotment, maturing on September 25, 2036. The securities are listed on the BSE Limited.
Instrument Structure and Terms
The debentures are classified as Lower Tier II Bonds, which qualify as Tier II capital for regulatory purposes. Key structural features include:
- Coupon Rate: Fixed at 9.95% per annum, payable annually.
- Tenure: 10 years from the date of allotment.
- Security: Unsecured, meaning no specific assets are pledged against the debt.
- Redemption: Bullet redemption at par (₹1 lakh per unit) plus accrued interest on maturity.
| Particulars | Details |
|---|---|
| Total Issue Size | ₹500 crore |
| Number of Units | 50,000 |
| Face Value | ₹1 lakh per unit |
| Coupon Rate | 9.95% p.a. |
| Maturity Date | September 25, 2036 |
| Listing Exchange | BSE Limited |
What the Numbers Show
The annual interest outflow for this tranche amounts to ₹49.75 crore (calculated as 9.95% of ₹500 crore), payable in equal installments of ₹9,950 per bondholder annually. The choice of a 10-year tenure aligns with the bank's need to match long-term asset liabilities while bolstering its Tier II capital adequacy ratio without diluting equity. The unsecured nature of the bonds indicates investor confidence in the bank's creditworthiness, as no collateral was required to secure the funds.
Historical Stock Returns for Equitas Small Finance Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -4.53% | -7.07% | -10.63% | +19.70% | +15.79% | +13.13% |
How will the ₹500 crore Tier II capital infusion impact Equitas Small Finance Bank's upcoming loan growth targets and credit expansion strategy?
What are the implications of the 9.95% fixed coupon rate for the bank's net interest margin (NIM) stability over the next decade?
Will this private placement influence the bank's decision to pursue further equity dilution or additional debt instruments in the near term?
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