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Juvina Maggie made post

Why is Axis Bank raising capital aggressively and did that lead to the sharp price fall?

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diksha shah answered.
1 month ago

Axis Bank will raise Rs.15,000 crore to shore up its balance sheet to be adequately prepared for the post COVID growth opportunities. They are expecting a spurt in NPAs after the EMI moratorium is lifted in August and need to be adequately capitalized for that. The Rs.15,000 crore will be raised via equity and convertible securities to spruce up Tier-1 capital.

In addition, Axis is also looking to realign its businesses which was evident from the decision to wind up its global offices. The equity dilution worries impacted the stock price of Axis in July 02 trading. However, such an impact should be temporary as in the long run banks need to be adequately capitalized to expand their loan books.