Synopsis: ICICI Bank has approved raising ?3,945 crore through Basel III-compliant Tier-2 bonds carrying a 7.40% annual coupon. The move strengthens the bank’s capital base while marking another major step in its structural expansion strategy.
ICICI Bank, one of India’s leading private sector lenders, has successfully raised ?3,945 crore through the issuance of unsecured, subordinated Tier-2 bonds via private placement. The announcement was made in a regulatory filing on Friday after market hours, underscoring the bank’s continued efforts to fortify its capital position.
The issuance includes 3,945 Basel III–compliant debentures, each with a face value of ?1 crore. According to the bank’s term sheet, the instruments carry an annual coupon rate of 7.40%, paid once every year. This capital-raising move aligns with regulatory capital requirements while supporting the bank’s growth strategies.
These Tier-2 bonds come with a tenor of 15 years, effective from the deemed allotment date of November 28, 2025, making the maturity date November 28, 2040. However, investors should note the inclusion of a call option, which allows the bank to redeem the bonds after 10 years, and subsequently, every year thereafter. This flexibility gives ICICI Bank the option to manage its liabilities more efficiently based on interest rate cycles and capital needs.
From a creditworthiness standpoint, the bonds have secured top-grade ratings:
- CARE AAA; Stable by CARE Ratings
- ICRA AAA (Stable) by ICRA Limited
These ratings reflect strong investor confidence and the bank’s robust financial health.
In another significant development, ICICI Bank has received approval from the Reserve Bank of India (RBI) to make ICICI Prudential Pension Funds Management Company Limited (ICICI PFM) its wholly-owned subsidiary. The bank plans to acquire the remaining stake from ICICI Prudential Life Insurance Company Limited, pending clearance from the Pension Fund Regulatory and Development Authority (PFRDA).
This strategic consolidation highlights ICICI Bank’s intent to strengthen its presence in the pension fund management space.
Meanwhile, brokerage house Geojit Investments recently upgraded ICICI Bank’s stock rating from Hold to Buy, assigning a revised target price of ?1,568, supported by a sum-of-the-parts (SOTP) valuation. The bank’s strong balance sheet, stable asset quality, and healthy capital adequacy continue to attract investor interest.
On Friday, ICICI Bank’s stock closed 0.24% lower at ?1,388.70 on the BSE, compared to its previous close of ?1,392.05.
With robust capital-raising measures and regulatory green signals for structural expansion, ICICI Bank appears poised for steady long-term growth.
Disclaimer: This article is for informational purposes only and is based on publicly available data and regulatory filings. It should not be considered financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.
