InvestorQ : Why is Carlyle investing Rs.5000 crore into Axis Bank?
Mitali Bhutta made post

Why is Carlyle investing Rs.5000 crore into Axis Bank?

Answer
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1 month ago


Carlyle is close to finalizing a deal to invest around Rs.5000 crore in Axis Bank through a preferential allotment. Axis Bank has been looking to shore up its capital base as a defence mechanism on account of the lag effect of COVID, which is yet to manifest itself.

Carlyle has confirmed that the due diligence for the deal had already begun and a formal announcement was likely to be made in the next three to four weeks. This will be Axis Bank's second major capital raising this year, after it raised Rs.10,000 crore in August.

It has been reported that Carlyle will be issued fresh Axis Bank shares and warrants that will be converted over 18-24 months. Carlyle may also get one board seat on the Axis Board considering the size of their investment.

It appears to be a season for fund raising. Private lenders in India have raised Rs.22,500 crore of equity in the past 12 months with the dual purpose of making higher provisions were required post lifting of moratorium and also to help boost the lending book.