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AU Small Finance Bank raises Rs 500 cr via NCD

AU Small Finance Bank on Friday said has raised tier II capital of Rs 500 crore through non convertible bonds issued on a private placement basis.

The bank raised the fund from a group of domestic investors which included mutual funds, banks, insurance companies and non-banking finance companies.

The base size of the issue was Rs 300 crore and a green shoe option of Rs 200 crore. The six-and-a-half year bond offered a coupon of 10.4 per cent, the company said in a release.

Earlier this year, Temasek Holdings, an investment arm of Government of Singapore, had committed an equity investment of Rs 1000 crore in the bank.
Out of this, Temasek has already invested Rs 475 crore in June 2018 and the remaining amount of Rs 525 crore is expected to be invested by or before December 2019.

Small finance banks are required to maintain a total capital adequacy ratio of 15 per cent with a minimum tier 1 CRAR ratio of 7.5 per cent.

As on September 30, AU Bank had a total CRAR of around 17.8 per cent with a tier 1 CRAR of close to 17.2 per cent indicating enough cushion for raising tier II capital.