Axis Bank share hits record high on plan to raise ₹12,000 cr via bonds

Shares of Axis Bank, the country’s third largest private sector lender, rose nearly 3% to hit a fresh all-time high in intraday trade on Thursday after the bank announced that it will raise ₹12,000 crore by issuing bonds. The lender plans to raise funds by issuing unsecured, rated, listed, subordinated, taxable, non-convertible, Basel III compliant Tier II bonds, it said in a post market hour filing to the exchanges.

As per the filing, the offer comprises a base issue of up to 1,000 bonds worth ₹1,000 crore with a green shoe option to retain oversubscription of up to 11,000 bonds amounting to ₹11,000 crore. This would be the second-largest fundraising by a bank through the debt market so far in the current financial year.

Continuing its gaining streak for the third consecutive day, shares of Axis Bank opened marginally higher at ₹917.65, against the previous closing price of ₹914.70 on the BSE. Extending opening gains, the stock gained as much as 2.6% to hit a new record high of ₹238.5, while the market capitalisation surged to ₹2.88 lakh crore. On the volume front, there was a surge in buying as 2.1 lakh shares changed hands over the counter compared with the two-week average volume of 1.5 lakh stocks by 11:35 am. Meanwhile, the BSE Sensex was trading 84 points higher at 62,495 levels, tracking mixed cues from global peers.

Axis Bank shares have risen more than 50% in the last six months, from its 52-week low of 618.10 on June 23, while it has added nearly 35% in the calendar year 2022. In the last one month, the banking heavyweight has gained 7%, while it climbed 4.5% in a week.

In April this year, the board of Axis Bank had approved a capital raise of up to ₹35,000 crore by issuing various debt instruments in Indian or foreign currency in domestic/overseas markets in one or more tranches.

“The board of directors of Axis Bank at its meeting held on April 28, 2022, had authorised the bank to borrow/raise funds in Indian / foreign currency by issue of debt instruments including but not limited to long term bonds, nonconvertible debentures, perpetual debt instruments, AT 1 Bonds, infrastructure bonds and Tier II capital bonds or such other debt securities as may be permitted under RBI guidelines from time to time up to an amount of ₹35,000 crore,” the bank said in the filing.

In a separate filing, domestic credit rating agency CRISIL has assigned ‘CRISIL AAA/Stable’ rating to its ₹3,775 crore infrastructure bonds and reaffirmed its ‘CRISIL AAA/CRISIL AA+/Stable/CRISIL A1+’ ratings on the other debt instruments of the lender.

Besides, ICRA has assigned [ICRA]AAA (Stable) rating to the bank’s infrastructure bonds/debentures and Basel III Tier II Bonds, and reaffirmed ratings of other debt instruments.

Earlier this month, State Bank of India, the country’s largest lender, raised ₹10,000 crore through its maiden infrastructure bond at a coupon rate of 7.51%. This is the largest single infrastructure bond issued by any bank in the country, which will be utilised by the PSU lender to enhance its long term resources for funding infrastructure and affordable housing segment. The tenor of these bonds is 10 years.