Axis Finance raises Rs 2,250 crore to expand lending in 2026

What Axis Finance announced

Axis Finance Limited (AFL), the non-banking financial company (NBFC) subsidiary of Axis Bank, has announced a combined primary capital raise of Rs 2,250 crore. The capital comes from two transactions: a Rs 1,500 crore rights issue from Axis Bank and a Rs 750 crore preferential issuance to Kedaara Capital. The preferential issuance is described as AFL’s largest primary capital raise so far and brings in its first external investor. Kedaara Capital’s investment is subject to customary statutory and regulatory approvals. The funding is positioned as growth capital for AFL’s next phase of lending expansion.

Split of the Rs 2,250 crore infusion

The Rs 1,500 crore component was approved by Axis Finance’s Board of Directors on April 17, 2026. Axis Bank said the rights issue will be completed before March 31, 2027, and may be done in one or more tranches. The Rs 750 crore component is being raised through a preferential allotment to Kedaara Capital. In a separate disclosure, the preferential issue amount is stated as approximately Rs 750.12 crore. Together, the two legs take the total capital raise to about Rs 2,250 crore.

Preferential issue: price and shares to Kedaara Capital

Axis Finance will issue equity shares to Kedaara Capital entities at a price of Rs 172.81 per share. The issuance includes 4,14,90,391 shares to one investor and 19,09,600 shares to another. Axis Bank said the shares are being issued to Kedaara Pearl Holding and Kedaara Capital Fund IV AIF. The transaction is expected to strengthen AFL’s lending capacity, based on the company’s stated plans for the capital. Completion remains subject to conditions and necessary approvals.

Axis Bank stake to fall, but subsidiary status remains

Following the preferential allotment, Axis Bank’s direct shareholding in Axis Finance will reduce from 100% to 94.92%. Axis Finance will continue to remain a subsidiary of Axis Bank, with the bank continuing as holding company and promoter. The deal effectively formalises a new shareholder partnership between the bank’s NBFC arm and a private equity investor, while keeping Axis Bank in control. This structure also aligns with the stated intent of raising primary capital without exiting the business.

Why Axis Finance is raising capital now

Axis Finance said the capital infusion is expected to strengthen its capital base and support the next phase of growth. The company also said the funding should enhance its Tier 1 capital and overall capital adequacy (CRAR). AFL plans to expand its diversified lending platform across retail, MSME and wholesale segments. It also highlighted a presence across both secured and unsecured lending. The stated use of funds is to support expansion across these segments rather than a shift to a single product line.

What Axis Bank’s CEO said

Amitabh Chaudhry, MD and CEO of Axis Bank, said Axis Finance has built a “high-quality lending franchise” anchored in governance and disciplined risk management. He said the capital infusion reflects Axis Bank’s long-term commitment to Axis Finance as part of the Axis Group. Chaudhry also said the funding positions the company for sustainable growth “with prudence” while building a diversified non-bank lending franchise in India. He added that Axis Bank is “delighted to welcome Kedaara Capital” as Axis Finance enters its next phase of growth.

Numbers and disclosures at a glance

Background: stake sale talks and regulatory context

Separate reports said Axis Bank had paused plans to sell a stake in Axis Finance after the central bank eased proposed restrictions on overlapping business activities between banks and their subsidiaries. In those reports, a proposed initial 20% stake sale was estimated at $150 million to $100 million, with Reuters noting it could not independently confirm the value. Sources in those reports said bids received were not lucrative enough, contributing to the decision to pull back on the sale after regulatory changes. Another report said Axis Bank began revaluing Axis Finance and considered selling more than 26% of the subsidiary, up from 20% initially intended.

Axis Finance scale: turnover and AUM figures cited in reports

Axis Finance was incorporated in April 1995 and is registered as an NBFC. One report said Axis Finance’s turnover rose to Rs 4,296 crore in FY25 from Rs 3,321 crore in FY24 and Rs 2,297 crore in FY23. Reuters also cited Axis Finance’s assets under management at Rs 41,583 crore as of March 31, 2025. Another report said Axis Finance had assets under management of Rs 43,012 crore at the end of September 2025, with a gross NPA ratio of 1%.

What to watch next

The preferential issue to Kedaara Capital remains subject to customary conditions and the receipt of necessary statutory and regulatory approvals. Axis Bank has also indicated the Rs 1,500 crore rights issue will be completed before March 31, 2027, potentially in multiple tranches. Investors will track the timing of these steps, given that the transactions change Axis Finance’s shareholder base for the first time by adding an external investor. Any further disclosures on capital adequacy metrics after the infusion, and updates on expansion across retail, MSME and wholesale lending, will likely be key milestones.