Equitas Small Finance Bank declares raising of ₹500 crore fund via NCDs with 50% green shoe option

Mint

4 days ago

Equitas Small Finance Bank declares raising of ₹ 500 crore fund via NCDs with 50% green shoe option
The board of Equitas Small Finance has approved the issuance of non-convertible debentures (NCDs) worth up to ₹ 500 crore through private placement.
The proposed issue will consist of up to 50,000 rated, listed, unsecured, redeemable, fully paid-up subordinated NCDs, each having a face value of ₹ 1 lakh. These debentures will be categorized as Lower Tier II Capital in line with Basel II capital adequacy norms.
The total issue size includes a green shoe option of up to 25,000 NCDs, amounting to ₹ 250 crore, allowing the company to raise additional funds depending on investor demand.
The issuance will be done in a single series and will help strengthen the company's capital base.
A green-shoe option is a provision that allows a company to raise additional funds by issuing more securities than initially planned, in case of strong investor demand. For non-convertible debentures (NCDs), this means the issuer can expand the total fundraising amount without launching a separate issue. It helps the company manage oversubscription efficiently and ensures better price and liquidity stability. In this case, the green-shoe option gives the company flexibility to raise an extra ₹ 250 crore—on top of the base issue of ₹ 250 crore—bringing the total potential issuance to ₹ 500 crore.
The stock has declined over 29 percent in the past one year. After gaining 5.5 percent in June, it has dropped another 6 percent so far in July. The start of the year was marked by sharp volatility — the stock rose 4 percent in January, fell 14.5 percent in February, slipped 3.3 percent in March, surged 22 percent in April, and declined 5 percent in May.