The Federal Bank Ltd.'s board of directors approved on Monday raising of funds worth Rs 6,000 crore by way of issuing debt instruments.
The fundraise could be through additional tier I bonds, tier II bonds, long-term bonds (infrastructure and affordable housing), masala bonds, green bonds, non-convertible debentures or such other debt securities. The fundraise of Rs 6,000 crore will be subject to approval from shareholders and other statutory approvals, according to an exchange filing.
At a meeting, the board approved raising of equity capital of the private sector bank through rights issue, private placement, preferential issue, further public offer, qualified institutional placement, global depository receipts, American depository receipts, foreign currency convertible bonds or other permissible modes.
The board has also recommended the re-appointment of Varsha Vasant Purandare as an independent director of the bank for a second term of three years.
Federal Bank is sharpening its focus on extending loans to micro, small, and medium enterprises to counter the margin squeeze due to rapid interest rate cuts, two people close to the development told NDTV Profit.
The private sector bank plans to grow its MSME loan book by 18-19% year-on-year in the current financial year, an official close to the development said.
Federal Bank shares closed 2.27% higher at Rs 276.60 apiece. This compares with a 0.47% decline in the benchmark Nifty 50. The stock has risen 20.24% in the last 12 months and 6.55% year-to-date.
Out of 45 analysts tracking the company, 36 maintain a 'buy' rating, eight recommend a 'hold' and one suggests 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 7%.
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