ESAF Small Finance Bank Limited has informed the Exchange regarding allotment of Non-Convertible Debentures (Tier II Subordinated Bonds) on Private Placement basis.
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ESAF Small Finance Bank has allotted 5,000 unsecured, listed, rated, taxable, redeemable, fully paid-up Basel II compliant lower Tier II subordinated bonds in the form of Non-Convertible Debentures (NCDs) on a private placement basis. Each NCD has a face value of Rs. 1,00,000, aggregating to Rs. 50 crores in total. The bonds carry a fixed coupon rate not exceeding 11.30% per annum and have a tenure of 69 months, maturing on May 14, 2031. The NCDs are proposed to be listed on the NSE's Negotiated Trade Reporting Platform (NTRP) under the New Debt Market segment. The ISIN assigned is INE818W08149.
The Rs. 50 crore capital raise strengthens ESAF Small Finance Bank's Tier II capital base, supporting regulatory compliance under Basel II norms and providing funds for lending growth. The 11.30% coupon is a relatively high cost of borrowing, but for a small finance bank it reflects market rates for subordinated debt. Equity shareholders are not directly diluted as these are debt instruments, though higher interest expenses may modestly pressure future profitability.