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Informist, Friday, Aug. 8, 2025

 

--AU Small Fin Bk Dy CEO Tibrewal: Will raise tier 2 capital Oct-Mar 

 

By Kabir Sharma

 

MUMBAI – AU Small Finance Bank, the largest small finance bank in India by assets and market capitalisation, is set to raise funds through the issuance of Basel-III compliant Tier-II bonds in Oct-Mar of the current fiscal year, said Uttam Tibrewal, the executive director and deputy chief executive officer at AU Small Finance Bank, said in a press conference Friday.

 

"We have raised it earlier and we will raise Tier-II capital in the second half of this year. Amount we will have to look at keeping in mind the expansion plans and how the business grows," Tibrewal said. Earlier in March, the small finance bank raised INR 7.7 billion through bonds maturing on Mar. 28, 2035, at a coupon of 9.20%. At 1439 IST, shares of the bank were down 0.1% at INR 742.95 on the National Stock Exchange.  

 

On Thursday, the Reserve Bank of India had given in-principle approval to AU Small Finance Bank Ltd. to transition into a universal bank. The bank had applied for the universal banking licence in September. 

 

AU Small Finance Bank has presence across India, with over 2,505 banking touchpoints across 21 states and four Union territories. As of Jun. 30, the bank served over 11.5 million customers and employed more than 53,000 people. The bank's net profit for the June quarter rose 15.6% on year and 15.3% on quarter to INR 5.81 billion. A rise of nearly 60% in other income, driven largely by treasury income, boosted the bank's bottom line.

 

While outlining its expansion and growth plans in post earnings call, the bank's management had said that it aims to open new branches in top cities of the country. "Our well-structured distribution channels are scaling efficiently, enabling us to deepen customer relationships and expand our deposit base sustainably," it said. "This year, we will add around 70-80 new deposit branches, mostly in the top cities," it added.

 

Banks have largely remained absent from the corporate bond market in FY26 so far, with a couple of issuances. In July, only one bank, Equitas Small Finance Bank raised INR 5.0 billion through bonds maturing in five years, marking a rare deal in an otherwise quiet market. Despite some banks securing board approvals, they did not raise funds through bonds as some of them were looking to raise funds through qualified institutional placements.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Written by Vaishali Tyagi

Edited by Akul Nishant Akhoury

 

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