ESAF Small Finance Bank To Raise Rs 1.50 Billion Via Tier II Bonds

Capital Infusion To Support Expansion Strategy  
ESAF Small Finance Bank Ltd has announced that its Board of Directors has approved the issuance of Tier II bonds aggregating up to Rs 1.50 billion. The fundraising will be executed via private placement and is intended to bolster the bank’s capital base in line with regulatory requirements under the Securities and Exchange Board of India’s guidelines.

The capital raised will be classified as subordinated debt and contribute to the bank’s Tier II capital, enhancing its overall capital adequacy ratio. ESAF aims to deploy the funds toward expanding its secured loan portfolio, improving risk buffers, and supporting business growth in underserved regions.

Major Takeaways  

• Board approves Tier II bond issuance of up to Rs 1.50 billion  
• Bonds to be issued via private placement under SEBI regulations  
• Proceeds to strengthen Tier II capital and support lending expansion  
• Focus on secured lending and reduction of microloan exposure  
• Strategic move to improve capital adequacy and operational scale
   

Sources: Business Upturn, Economic Times, Rediff Money, ESAF Small Finance Bank Corporate Filings