ICICI Bank board has approved Rs 15,000 crore fund raising through a share sale, in one or more tranches, through means such as private placement, preferential issue, qualified institutions placement, follow-on public offering or a combination thereof.
The stock reacted positively to the development, gaining almost 2% in the early trade on Thursday.
The country’s second-largest private-sector lender joins the list of other lenders that are bolstering buffers as the pandemic threatens to push up bad loans.
Indian banks are boosting balance sheets in anticipation of more soured debts as the coronavirus hammers businesses and leaves millions jobless. Stronger capital will make it easier to boost lending once the fallout from the pandemic subsides and companies get back to production.
ICICI Bank has already raised about Rs 3,100 crore by paring stakes in its publicly traded units including ICICI Prudential Life Insurance Co. and ICICI Lombard General Insurance Co. The lender had a core equity capital ratio of 13.4% as of March 31, more than double the regulatory requirement of 6.125%.
Lenders including Axis Bank, Yes Bank and HDFC have also announced plans to tap equity capital markets. Kotak Mahindra Bank has already raised nearly $1 billion rupees.
According to a Credit Suisse Group AG report in May, Indian lenders need to raise $20 billion of capital, of which state-owned banks will require $13 billion, to strengthen buffers against potential loan defaults.
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