Bengaluru-based Jana Small Finance Bank's (SFB) holding firms have raised around Rs 1,200 crore of new debt from shareholders TPG Capital and Singapore's sovereign financial fund GIC, declared people aware of the development.
The funds raised were used by the bank's holdcos to redeem non-convertible debentures (NCDs), along with accrued interest, that matured at the end of May. These NCDs were largely held by TPG and GIC themselves, the people said.
The NCDs were issued in 2017 and 2018. The proceeds were then infused into the bank, which was struggling with a massive pile of bad loans following the government's demonetisation drive in late 2016. In FY18, the bank saw its gross non-performing assets rise to around 42%. It reported massive losses for two consecutive fiscal years: Rs 2,504 crore in FY18 and Rs 1,949 crore in FY19.
"New NCDs have been issued to TPG and GIC at two holdcos of the bank - Jana Capital Ltd and Jana Holdings Ltd. With the refinancing, redemption pressure at the holdco level has been addressed with existing shareholders deciding to continue to back the bank," said one of the people.
The old NCDs had a maturity of 5-6 years with a coupon in the range of 4.95-5.05%. The overall rate of return on those was equity-linked (valuation of Jana SFB at the time of maturity), with a base internal rate of return of 16.5% and a cap of 25%.
The new NCDs have a tenure of three years, they will mature in June 2026, and carry a coupon of 3%. The overall return on the NCDs at maturity will be close to mid-teens, a person said.