Indusind defers fund raising due to ’market conditions’ post Yes Bank revamp

  • Indusind says in view of the current market conditions and since the bank is adequately capitalised at present, it has been decided not to consider raising of Base-III compliant debt capital instruments for the time being
  • Indusind Bank has also deferred its board meeting scheduled for Monday

IANS
Updated8 Mar 2020
Photo: Mint
Photo: Mint

The crisis at Yes Bank is affecting sentiment in the banking sector and fund raising as Indusind Bank has deferred its board meeting scheduled for Monday to consider raising funds.

"In view of the current market conditions and since the bank is adequately capitalised at present, it has been decided not to consider raising of Base-III compliant debt capital instruments for the time being. The board meeting scheduled for 9 March 2020 is therefore being deferred," Indusind Bank said in a regulatory filing.

A meeting of the Board of Directors of the bank was proposed to be held on Monday to consider and approve, the borrowing and raising of funds in Indian and/or foreign currency by issuance of debt securities in the nature of additional Tier I capital (AT1) and/or Tier 2 Capital of the bank, Indusind Bank said.

The Yes Bank scare and the writedown of its AT1 capital seems to have spooked Indusind Bank.

As per the scheme for reconstruction of Yes Bank, no change has been made in the rights and liabilities of the reconstructed bank but its Additional Tier 1 capital of 8,700 crore has been written down completely and permanently. This in turn has led to huge losses for bond holders including mutual funds.

Analysts had flagged the issue that after the Yes Bank writedown it would become difficult for private and public sector banks to raise capital through this route.

Acuité Ratings said that the permanent and full write-down of AT1 bonds of Yes Bank as envisaged in the reconstruction scheme will substantially add to the risk perception on these hybrid instruments and limit their issuances only by large public and private sector banks.

"In our estimates, investors i.e. mostly domestic mutual funds and banks would lose both principal and interest payable on AT1 bonds amounting to 10,800 Cr of Yes Bank".

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeIndustryBankingIndusind defers fund raising due to ’market conditions’ post Yes Bank revamp

Most Active Stocks

Tata Steel

179.85
10:29 AM | 21 JUN 2024
-2.5 (-1.37%)

Bharat Electronics

305.00
10:27 AM | 21 JUN 2024
-7.05 (-2.26%)

ITC

419.60
10:28 AM | 21 JUN 2024
-3.75 (-0.89%)

Vedanta

469.95
10:29 AM | 21 JUN 2024
-0.3 (-0.06%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Railtel Corporation Of India

476.20
10:27 AM | 21 JUN 2024
41.8 (9.62%)

Titagarh Rail Systems

1,584.25
10:29 AM | 21 JUN 2024
89.05 (5.96%)

Rail Vikas Nigam

409.70
10:28 AM | 21 JUN 2024
22.35 (5.77%)

Honasa Consumer

449.85
10:26 AM | 21 JUN 2024
23.5 (5.51%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    74,710.00218.00
    Chennai
    74,128.00-146.00
    Delhi
    74,637.00-73.00
    Kolkata
    74,128.00-728.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L-0.06
    Chennai
    100.88/L0.03
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsloanPremiumGet App