Federal Bank Gets Nod to Raise $500 Million
Federal Bank Ltd has received board approval to raise up to $500 million through foreign currency-denominated bonds via its IFSC Banking Unit (IBU) in GIFT City, with the issuance planned in one or more tranches and a maximum maturity of up to 5 years, subject to applicable regulatory and statutory approvals.
The proposal follows the bank’s August 18, 2026 disclosure, while details required under the SEBI circular dated January 30, 2026 will be disclosed after the relevant Board or Committee approvals for each tranche. The fundraising comes as the bank reported a strong Q1 FY27 performance, with Net Interest Income (NII) rising 26% year-on-year to ₹2,946 crore from ₹2,336 crore, while net profit increased 36.5% to ₹1,177 crore from ₹862 crore in the corresponding quarter.
Asset quality also showed improvement sequentially, with Gross NPA declining to 1.52% from 1.62% and Net NPA improving to 0.18% from 0.20%; net NPA stood at ₹506 crore compared with ₹569 crore in the previous quarter. Provisions declined to ₹317.7 crore from ₹741 crore sequentially and ₹400 crore a year earlier, while Net Interest Margin (NIM) improved to 3.33% from 2.84% year-on-year.
Overall, the proposed bond issuance adds a potential foreign-currency funding avenue to Federal Bank’s balance sheet, while the Q1 numbers indicate higher earnings, improved margins and sequentially better asset-quality metrics.