These privately placed bonds are issued as unsecured, subordinated, rated, listed, nonconvertible, fully paid-up, taxable, redeemable Basel III compliant tier-2 bonds (in nature of debentures) at a face value of Rs 1 crore each and were raised through private placement on the NSE e-bidding platform.
The bonds carry a rating of CRISIL AA+/ Stable from CRISIL Ratings and IND AA+/Stable by India Ratings & Research. IDFC FIRST Bank’s tier-2 bond ratings were recently upgraded to CRISIL AA+/Stable from CRISIL AA/Positive by CRISIL Ratings.
The participation for the issuance came from domestic qualified institutional investors. The bidding on NSE e-bidding platform also witnessed healthy interest from corporates, public pension funds, provident funds and insurance companies, and the overall issue was oversubscribed.
The unsecured, tier-2 Bonds were raised for a tenor of 10 years with a call option at the end of five years and carry a coupon of 8.40%. Including this capital raise, the capital adequacy of IDFC FIRST Bank, as of March 2023 financials, would be 17.68%, and will likely provide greater headroom for growth of the bank.
On Tuesday, the company’s shares closed 0.32% lower at Rs 78 on NSE. The stock has risen about 28% on a year-to-date basis.
The bank’s shares have been among the top performers on the Street in the last one year period. Following a stupendous rally of nearly 143%, brokerage CLSA recently downgraded the company to underperform. The brokerage, which had a “buy” rating earlier on the stock, revised the target price to Rs 85. The strong run meant that the valuations were quite stretched.According to Trendlyne data, IDFC First Bank has an average target price of Rs 75.83, showing a downside of 3% from the current levels
