According to reports from CNBC TV18, ESAF Small Finance Bank Ltd board approved a proposal on Wednesday, September 23, 2026, to raise up to ₹500 crore through private placement of unsecured, redeemable, non-convertible debentures (NCDs) as Tier II Capital. The issuance will be carried out in one or more tranches up to the conclusion of the bank's next Annual General Meeting. The proposed NCDs will comprise Listed, Rated, Taxable, Unsecured, Transferable, Redeemable and Fully Paid Up Basel II-compliant Lower Tier II subordinated bonds.
As reported by CNBC TV18, the proposed fundraise will be within the overall borrowing limit approved by shareholders at the bank's 10th Annual General Meeting held on August 14, 2026. The bank stated that the proposed fundraise is in line with its business plan for the financial year 2026-27. The NCDs will be issued in one or more tranches through private placement, with the total issue size capped at ₹500 crore. The proposed securities are to be listed either on the Negotiated Trade Reporting Platform under the New Debt Market of the National Stock Exchange of India Ltd or the Wholesale Debt Market of BSE Ltd.
According to the bank's stock exchange filing reported by CNBC TV18, the Board has authorised the Management Committee to determine the terms and conditions of the issue and undertake all necessary actions related to the issuance of the NCDs, including ancillary matters. The tenure, allotment and maturity dates, coupon or interest rate, payment schedule, principal repayment and security or charge over assets will be set out in the relevant transaction documents. Shares of ESAF Small Finance Bank Ltd ended at ₹40.99, up by ₹1.77, or 4.51%, on the BSE following the announcement.
As reported by CNBC TV18, the bank stated there is currently no delay or default in payment of interest or principal. The bank emphasized that there is no delay or default in payment of interest or principal, while details of redemption will be specified in the relevant transaction documents. This capital raise initiative comes as part of the bank's strategic expansion plans for the upcoming financial year.
