ESAF Small Finance Bank Limited has informed the Exchange regarding the outcome of the Board meeting held on November 03, 2025.
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ESAF Small Finance Bank's board, which met on November 3, 2025, approved raising ₹150 crore by issuing Basel II-compliant Lower Tier II Subordinated Bonds in the form of Non-Convertible Debentures through private placement. The bonds will carry a coupon rate of up to 11.30% per annum and have a tenure of 69 months, with deemed allotment on November 10, 2025 and maturity on August 10, 2031. The issuance will consist of 15,000 NCDs with a face value of ₹1 lakh each, and these unsecured bonds will be listed on NSE's Negotiated Trade Reporting Platform (New Debt Market). This tranche is part of a broader ₹1,000 crore borrowing plan that shareholders had already approved at the bank's 9th AGM on September 24, 2025. The board also authorised its Management Committee to finalise the timing, pricing, and detailed terms of the remaining issuances within the approved ceiling.
Because this is a debt raise and not equity, existing shareholders will not face any dilution. The Tier II bonds will strengthen the bank's capital base, supporting lending growth and regulatory capital adequacy, though the relatively high coupon rate of 11.30% reflects the bank's risk profile and will add to its interest expenses over the life of the bonds.