IFC investing up to $100M in Axis Bank

International Finance Corporation (IFC), the private sector investment arm of the World Bank, is investing up to $100 million in Axis Bank Ltd, the country's third-largest private sector bank, according to an IFC disclosure.

The investment consists of up to $100 million equivalent in Indian rupees in a fixed-rate, infrastructure bond issued by Axis Bank, it said in the disclosure.

The funding is the part of IFC’s strategy for South Asia which focuses on inclusive growth, and regional & global integration. For IFC, one of the most active private investors in India, this would be first investment in banking sector and 14th in India since January this year.

“Given the high level of NPLs in public sector banks, private sector banks are expected to play a vital role in channelling liquidity to infrastructure and affordable housing projects. Axis Bank has traditionally been a leading financier of infrastructure and housing and the proposed project will support the bank in expanding this business and contributing to the government's priorities for economic growth,” IFC said in the disclosure.

With assets of around $64 billion as of September 30, 2014, Axis Bank offers the entire spectrum of financial services to customer segments covering infrastructure, large and mid-corporates, MSME, agriculture and retail businesses.

The bank has a large footprint of over 2,500 domestic branches and 13,000 ATMs spread across the country and had assets of around $64 billion as on September 30, 2014. It also has overseas offices in Singapore, Hong Kong, Shanghai, Colombo, Dubai, Abu Dhabi and an overseas subsidiary in London. Over 50 per cent of the bank’s branches are in rural and semi-urban areas.

Recently, the largest private sector lender ICICI Bank raised Rs 3,900 crore by selling 10-year bonds at a coupon rate of 9.25 per cent to a clutch of domestic and institutional investors.

(Edited by Joby Puthuparampil Johnson)

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