AU Small Finance Bank's Strategic Bond Boost

AU Small Finance Bank has raised Rs 770 crore through Tier-II bonds to support business growth. These bonds have a 10-year maturity with a 9.20% coupon rate. The initiative is set to enhance the bank's capital adequacy ratio by about 1%, solidifying its capital position amidst challenging market conditions.

AU Small Finance Bank announced on Friday that it has successfully raised Rs 770 crore through Tier-II bonds, aiming to fuel its business expansion.

The bonds, which mature in 10 years, promise a 9.20% annual coupon rate, positioning the bank for sustainable growth by increasing its capital adequacy ratio by approximately 1%.

This bond issuance marks one of the largest for a small finance bank, accomplished despite a challenging market and tight liquidity, cementing the institution's robust capital stance following a previous capital raise in August 2022.

(With inputs from agencies.)