Equitas Small Finance Bank to consider Tier II fundraise

Equitas Small Finance Bank Limited (

) will consider raising capital through Lower Tier II bonds in a board meeting scheduled for September 16. The bank's shareholders have already approved a broader capital-raising framework, including up to ₹1,250 crore through QIP and up to ₹500 crore through NCDs or bonds. The specific proposal before the board today is the issuance of unsecured, subordinated, transferable and redeemable Lower Tier II bonds through private placement, subject to regulatory approvals. My view For a bank, additional Tier II capital can support balance-sheet growth and regulatory capital requirements. But the amount and pricing of today's issuance matter more than the headline itself. I would watch the final issue size, coupon and investor response. These will indicate the cost of the additional capital and how efficiently Equitas can use it for future growth. Disclosure: I do not hold any position or have any interest in Equitas Small Finance Bank Limited as of the time of posting.