Equitas Small Finance Bank Board Clears ₹500 Crore Lower Tier II NCD Issue

Equitas Small Finance Bank has received board approval to raise up to ₹500 crore through Lower Tier II non-convertible debentures, with the proposed issue set to be placed privately with eligible investors. 

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The decision was taken at the bank’s board meeting on September 16, 2026. The fundraise will involve up to 50,000 NCDs carrying a face value of ₹1 lakh each. 

The debentures will be issued as a single series in dematerialised form. They will be rated, listed, unsecured, subordinated, transferable, redeemable and fully paid-up. 

NCDs to form part of Lower Tier II capital 

The NCDs have been classified as Lower Tier II Capital in accordance with the Basel II capital adequacy guidelines. 

Instead of launching a public offering of the securities, the Equitas Small Finance Bank intends to offer them privately to a few investors who qualify for such an offering. 

The NCDs being unsecured in nature, there is no requirement of creating any charge against the assets of the company for issuing them. These securities do not enjoy any right, interest or privilege. 

The listing of NCDs will be done on BSE Limited. 

Coupon and tenure yet to be decided 

While the board has cleared an issue of up to ₹500 crore, some of the commercial terms are still to be finalised. 

The tenure of the NCDs, including the allotment and maturity dates, will be approved by the board separately. The coupon or interest rate, payment schedule and terms governing repayment of the principal will also be decided by the board. 

The September 16 meeting began at 11 am and concluded at 11:45 am. 

Equitas Small Finance Bank had earlier informed the exchanges on September 9 that its board would meet to consider a capital raise through Lower Tier II NCDs. The latest disclosure marks the board’s approval of that proposal. 

The bank’s equity shares trade under the symbol EQUITASBNK, while the September 16 disclosure was submitted to both the National Stock Exchange of India and BSE.