Five banks to raise Rs 62K cr, may grab NBFC share

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At least five banks are planning to raise an aggregate of Rs 62,000 crore in funds this year, according to a report by The Economic Times.

Three public sector banks (PSBs) – State Bank of India, Bank of Baroda and Canara Bank – and two private lenders – Axis Bank and RBL Bank – are looking to raise capital to fuel growth.

It is expected that the fundraising will also help the banks grab market share from non-banking financial companies (NBFCs).

SBI intends to raise Rs 17,000 crore through the issue of bonds, the report said. Of this, Rs 7,000 crore will be raised as additional Tier 1 capital (AT1).

Axis Bank plans to raise Rs 18,000 crore through a combination of qualified institutional placements and depository receipts.

Axis Bank has already announced its intention to raise Rs 3,000 to Rs 3,500 crore.

“We will raise capital in the next few months. It will happen this fiscal. We have taken an enabling resolution for raising between Rs 3,000 crore and Rs 3,500 crore, which was confirmed in the AGM last week,” RBL Bank CEO Vishwavir Ahuja told The Economic Times earlier in July.

Canara Bank, too, has announced a plan to raise up to Rs 12,000 crore through a mix of equity and bonds.

Bank of Baroda intends to raise Rs 1,500 crore through employee share purchase scheme (ESPS) and Rs 4,500 crore through AT1 bonds.