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regular-article-logo Tuesday, 27 February 2024

ICICI Bank to tap bond market

Bank of Baroda says its board will meet on April 21 to consider the raising of foreign currency fund through multiple options

Our Bureau Mumbai Published 18.04.23, 04:23 AM
The ICICI share on Monday rose 0.24 per cent or Rs 2.20to Rs 901.45 on the BSE.

The ICICI share on Monday rose 0.24 per cent or Rs 2.20to Rs 901.45 on the BSE. File photo

The board of directors of ICICI Bank — which is due to announce its Q4 and FY24 results on Saturday — will consider the issue of debt securities including NCDs and bonds in multiple tranches and possibly private placement.

Bank of Baroda also said on Monday its board will meet on April 21 to consider the raising of foreign currency fund through multiple options: bonds, certificate of deposits and other borrowings.

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Indian banks have been raising funds through the issue of AT1 bonds despite the controversy surrounding such papers.

HDFC Bank on Saturday said it would raise Rs 50,000 crore from bonds during the current fiscal to fund business growth with part of the proceeds to be raised in perpetual debt instruments (AT1 bonds). In March, SBI raised Rs 3,717 crore in AT1 bonds.

While AT1 bonds are a perpetual debt instrument banks use to augment their core capital, issuers can redeem them through a call option after a specified period.

The bonds hogged the limelight when Credit Suisse was rescued by its larger rival UBS. As much as $16 billion in AT1 bonds from Credit Suisse were written off as part of the deal.

In India, Rs 8,300 crore of AT1 bonds of Yes Bank were also written off in 2020, and the dispute is now pending with the Supreme Court.

Reserve Bank governor Shaktikanta Das has defended the AT1 bonds. Speaking to the press after the monetary policy announcement last week, he said the AT1 bonds ecosystem remains quite robust and stable.

In December, ICICI Bank raised Rs 5,000 crore by issuing bonds to support its business expansion.

The ICICI share on Monday rose 0.24 per cent or Rs 2.20 to Rs 901.45 on the BSE.

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