South Bank India seeks to raise INR 750 crore for growth opportunities

South Indian Bank
Source: South Indian Bank

South Indian Bank is a Thrissur, Kerala-based bank that offers a diversified loan portfolio with an emphasis on growth in retail loans. Most recently, the bank has announced to seek funds worth INR 750 crore intending to strengthen balance sheet records and find growth opportunities.

According to a report by the Financial Express, the bank aims to target 6Cs with this funding; Competency building, Current Account and Savings Account, Cost-to-income, Customer focus, Capital raising and Compliance to achieve profitability through credit growth, as mentioned in regulatory filings.

South Indian Bank is one of the oldest banks in the south region that was established during the Swadeshi movement. The bank is one of the first private sector banks in Kerala to become a scheduled bank under the Reserve Bank of India in 1946.

As per the company profile on CrunchBase, South India Bank has till date raised total funding worth USD 90.7 million in over 3 financing rounds.

As mentioned in a report by Financial Express, the bank is seeking to raise new funds to strengthen its balance sheet, under their new plan called “Vision 2024”. Under this new plan, South Indian Bank is aiming to reach a loan book record of INR 1 lakh crore, Net Interest Margin of 3.5%, Current Account and Savings Account of 35% and Provisioning Coverage Ratio of over 65% by the year 2024.

According to several sources, South Indian Bank has taken prior approval from the shareholders for raising the required equity amount during the fiscal year with a condition of not exceeding INR 750 crore.

Vision 2024 includes a vertical structuring plan for assets business and a strong data analytics team to play a crucial role in business, according to Financial Express. The approval for raising equity fund from the shareholders was obtained during the bank’s last Annual General Meeting (AGM) wherein it was mentioned that the capital equity can be raised either in Indian or in foreign currency by the issuance of debt securities up to INR 500 crore.

Furthermore, the authorised capital of the bank can be increased to INR 350 crore, as the lender has taken approval from the shareholders to do the same, according to sources.

South Indian Bank’s investors that participated in its last Post-IPO Equity round include CX Partners, Chrys Capital, Multiples Alternate Asset Management Private Limited and The Carlyle Group.