Federal Bank on Tuesday said it plans to raise up to ₹12,000 crore, majority of which is targeted to come through borrowing instruments.

The board of directors in its meeting on June 19, 2020, cleared proposals to raise up to₹8,000 crore through various debt instruments in Indian/foreign currency and ₹4,000 crore through a mix of debt and issue of equity shares, Federal Bank said in a regulatory filing.

The Kerala-based lender said it will seek shareholders nod for the fund raising plans in its ensuing annual general meeting on July 16, 2020, by way of video conference or other audio visual means.

The fund raise, it said, may take place by way of any mode like rights issue, private placement, qualified institutions placement, preferential issue, further public offer, global depository receipts, American depository receipts, foreign currency convertible bonds or through any other permissible mode or a combination thereof, it added.

The board also cleared the proposal for borrowing in Indian currency/in equivalent foreign currency by way of issue of debt instruments.

This including but is not limited to additional tier I bonds (AT1 bonds), tier II bonds, long term bonds (infrastructure and affordable housing), masala bonds, green bonds, non-convertible debentures or such other debt securities as may be permitted by RBI from time to time, up to ₹8,000 crore in domestic market and/or overseas market, it said.

The debt may be issued by the bank in one or more tranches on a private placement basis within the overall borrowing limits of the bank.

Also, the board of directors has decided to amend the memorandum of association of the bank for increase of authorised capital of the bank from ₹500 crore comprising 250 crore equity shares of face value of ₹2 each to ₹800 crore comprising 400 crore equity shares of face value of ₹2 each.

“The board further recommended the same for the approval of shareholders by way of ordinary resolution at the forthcoming annual general meeting and to modify/add required clauses in the memorandum of association,” it added.

Federal Bank stock closed at ₹56.95 apiece on NSE, up 4.88 per cent over its previous close.

Published on June 23, 2020

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