📌 What’s Happening?
Federal Bank's board on June 30, 2025, approved a comprehensive fundraising plan to raise up to ₹6,000 crore through a mix of debt and equity instruments, pending shareholder and regulatory approvals
🎯 Fundraising Plan Breakdown
1. Debt Instruments – Up to ₹6,000 Crore
Additional Tier I (AT1) bonds
Tier II bonds
Long-term infrastructure & affordable housing bonds
Masala bonds, green bonds, non-convertible debentures (NCDs)
Issued via private placement, both domestic and international markets
2. Equity Options – Flexible Routes
Possible channels include:
Rights Issue
Preferential Issue
Further Public Offer (FPO)
Qualified Institutional Placement (QIP)
Global Depository Receipts (GDR) / American Depository Receipts (ADR)
Foreign Currency Convertible Bonds (FCCBs)
🚀 Why This Matters
Capital Cushion: Strengthens the bank’s capital adequacy to meet regulatory norms.
Growth Push: Supports expansion in high-growth segments like MSME lending
Investor Attention: Federal Bank shares are gaining traction after the announcement
📊 Financial Highlights (Q4 FY25)
Net profit rose YoY to ₹1,030.2 crore
Net interest income (NII) increased 8.3% YoY to ₹2,377.4 crore
Gross NPA ratio improved to 1.84%; Net NPA down to 0.44%
✅ Key Takeaways for Investors
Corporate Bond Investors: Watch new debt issues like AT1 or green bonds for high(er) yields.
Equity Shareholders: Be alert for rights issues or equity dilution—track pricing and terms.
Credit Analysts & Bankers: The move provides insight into capital strategy ahead of growth targets.
💭 Final Thoughts
Federal Bank’s ₹6,000 crore fundraising plan is a balanced move to shore up capital while enabling future growth. Whether you’re a debt investor, equity shareholder, or just tracking market leadership, this development is significant.
published on 1st July
Publisher : SMITA
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