ESAF Small Finance Bank to Consider Fundraising via NCDs on March 21

ESAF Small Finance Bank (ESAF SFB) has scheduled a board meeting on March 21, 2025, to discuss raising funds through the issuance of Non-Convertible Debentures (NCDs) under Tier II Bonds on a preferential basis.

As of March 19, 3:11 PM, ESAF Small Finance Bank Limited’s stock stands at ₹27.49, up 2.80% (+₹0.75) today, but down 44.55% over the past six months and 52.27% over the past year.

Fundraising Through Tier II Bonds

The proposed issuance will be carried out via private placement and will comply with the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Securities) Regulations, 2021, along with SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.

The fundraising, if approved, will remain within the existing borrowing limits set under Section 180(1)(c) of the Companies Act, 2013. These limits were previously approved by the bank’s shareholders on August 14, 2024.

SEBI Compliance and Market Regulations

ESAF SFB, like all financial institutions, must maintain adequate capital reserves. The issuance of Tier II Bonds will help the bank in strengthening its capital adequacy ratio, as required under regulatory guidelines.

No Equity Dilution

Since the fundraising is being done through NCDs, it will not affect the equity structure of the bank. Instead, it will increase its long-term debt capital while allowing it to meet financial and operational requirements.

Board Meeting Details

• Date: March 21, 2025
• Purpose: Consideration of fund-raising through NCDs (Tier II Bonds)
• Method: Private placement on a preferential basis
• Regulatory Compliance: SEBI (Issue and Listing of Non-Convertible Securities) Regulations, 2021

The bank has requested stock exchanges and stakeholders to take note of this upcoming development.

Conclusion 

The bank has stated that details of the board’s decision will be published on its official website, after the meeting. The information is also being provided to stock exchanges as per regulatory requirements.

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