Indian Bank has joined the race with other banks to raise funds through infrastructure bonds to support the growing balance sheets. The public sector bank has invited bids on Thursday to raise up to Rs 5,000 crore through the issue of 10-year infrastructure bonds, according to a person with knowledge of the matter.
The issue has a base size of Rs 2,000 crore and a greenshoe option of Rs 3,000 crore. Bidding for this bond issue will take place on the BSE's electronic bidding platform from 11 a.m. to noon, the person told NDTV Profit on the condition of anonymity.
The bank plans to raise these funds for refinancing purposes. For the current financial year, the board of Indian Bank had approved raising up to Rs 12,000 crore by way of equity and debt.
The last time Indian Bank tapped the bond market was in January 2021, when it raised Rs 2,000 crore through a Tier-II bond issue at a coupon of 6.18%, according to data by Informist Media.
In an interview with NDTV Profit last month, Reserve Bank of India Governor Shaktikanta Das said it is positive to see banks raising funds through infrastructure bonds.
Banks and financial institutions raise money through infrastructure bonds to finance long-term infrastructure projects. These bonds have a minimum maturity of seven years and are eligible for some regulatory exemptions.
Shares of Indian Bank closed 0.10% higher at Rs 523.05 apiece on the BSE, compared to a 0.46% advance in the benchmark Sensex.
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