The bank will raise funds through issue of equity shares/depository receipts and/or any other instruments or securities representing either equity shares and/or convertible securities linked to equity shares including through qualified institutions placement (QIP)/ American depository receipts (ADRs)/ global depository receipts (GDRs) program, preferential allotment or such other permissible mode or combinations, the bank said in a statement on Thursday, 2 July 2020.
The move comes days after Axis Bank's issuer credit rating was downgraded to junk or BB+ by rating agency S&P Global.
We lowered our ratings on Axis to reflect our expectation that heightened economic risks facing India's banking system will affect the bank's asset quality and financial performance. While Axis' asset quality is superior to the Indian banking sector average, its level of nonperforming assets (NPAs) will likely remain high compared to international peers'. Nevertheless, we expect the bank to maintain its strong market position and adequate capitalization, the ratings agency said in a release.
S&P said the stable outlook reflects its view that its ratings on Axis already factor in some deterioration in the bank's asset quality and performance over the next 12 months. The agency said it could lower the ratings on Axis if the bank's stressed assets rise significantly beyond the system average over the next few quarters.
Axis Bank is the third largest private sector bank in India. The bank offers the entire spectrum of services to customer segments covering large and mid-corporates, SME, agriculture and retail businesses. It has 4,800 branches, 17,801 ATMs and 4,917 cash recyclers spread across the country as of 31 March 2020 and nine international offices.
The private lender reported a net loss of Rs 1,387.78 crore in Q4 March 2020 compared with net profit of Rs 1,505.06 crore in Q4 March 2019. Total income rose 10% to Rs 20,219 crore in Q4 March 2020 over Q4 March 2019.
Shares of Axis Bank were down 2.23% to Rs 423.60. The stock jumped 7% in the past two sessions to end at Rs 433.25 yesterday from its recent closing low of Rs 404.80 recorded on 29 June 2020.
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