ICICI Bank Raises ₹1,000 Crore via Tier-II Bonds Amid Strong Demand

In a move to strengthen its capital base, ICICI Bank, India’s second-largest private sector lender, tapped the domestic debt capital market on Thursday to raise ₹1,000 crore via Tier-II bonds, as per news reports. The issuance comes at a time when market yields are rising, particularly for long-term papers, indicating a strategic capital-raising effort in a volatile rate scenario.

Successful Bond Issuance with Tight Pricing

ICICI Bank, India’s second-largest private sector lender, has raised ₹1,000 crore through Tier-II bonds at a coupon rate of 7.45%. The fundraising was conducted through the domestic debt capital market on Thursday. The issuance comprised a base issue size of ₹500 crore with a green shoe option of ₹500 crore. The Tier-II bonds have a maturity of 15 years and include a call option after 10 years. 

Investor Appetite Drives Competitive Yield

Tier-II bonds are subordinated debt instruments issued by banks to strengthen their Tier-II capital, a key regulatory requirement under Basel III norms. These instruments carry more risk than senior debt but are ranked higher than equity in the capital structure. The private sector lender is re-entering the market after a long absence. Last year, it raised ₹3,000 crore through 10-year infrastructure bonds at 7.53%.

As of March 2025, ICICI Bank's capital adequacy ratio was 16.55%. This was primarily made up of its CET-I (Common Equity Tier-I) ratio at 15.94%, with the remaining 0.61% coming from Tier-II capital.

Read More: Bank of India Plans ₹20,000 Crore Fundraise Through Infra Bonds!

ICICI Bank Share Price Performance 

As of 27 June 2025, 12:20 PM, ICICI Bank shares are trading at ₹1,449.30 per share, a surge of 0.71%. Over the past month, the stock has declined by 1.28%. The stock has given positive returns of 20% over the past year.

Conclusion

ICICI Bank’s successful Tier-II bond issuance at a competitive rate demonstrates strong investor confidence in the bank’s credit quality and the appetite for well-rated long-duration debt, despite macroeconomic uncertainties. The issuance also supports the bank’s efforts to enhance its regulatory capital base.

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