Axis Bank to raise ₹5,000 crore via debentures, stock ends flat

Axis Bank has announced its plan to raise up to ₹5,000 crore through the issuance of Series-9 long-term non-convertible debentures (NCDs) on a private placement basis. The move is part of the bank’s previously authorised framework to secure up to ₹35,000 crore via debt securities, a strategy approved by both the Board of Directors and shareholders.

The bank said the issuance will include a base size of ₹2,000 crore and a green shoe option of ₹3,000 crore to retain oversubscription, taking the total proposed fundraise to ₹5,000 crore.

The Series-9 debentures are structured as fully paid, senior, rated, listed, unsecured, taxable, and redeemable instruments.

The current fundraising initiative forms part of the bank’s efforts to support its balance sheet and address regulatory provision requirements following recent quarterly performance.

On bourses, shares of Axis Bank ended Friday at ₹1,275.75, reflecting a decline of ₹9.50, or 0.74%. The fundraising announcement follows the lender’s second quarter financial results, where net interest income rose 1.9% year-on-year to ₹13,744 crore, exceeding market expectations. However, net profit for the period stood at ₹5,090 crore, marking a 26% fall compared to the previous year. The bank responded to a Reserve Bank of India advisory by making a one-time standard asset provision of ₹1,231 crore for two discontinued crop loan products. Axis Bank stated, "The standard asset provision will be written back into the P&L when all outstanding loans in the two discontinued product variants are recovered or closed in the normal course of business by March 31, 2028," Axis Bank said.

The provision write-back, scheduled by 2028, is expected to be monitored closely as the bank continues to manage discontinued loan exposures and adapt to evolving industry conditions. 

Within the private sector banking landscape, Axis Bank's primary competitors include ICICI Bank, HDFC Bank, and Kotak Mahindra Bank.