Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
State-owned Punjab & Sind Bank has successfully raised INR 3,000 crore via its inaugural issuance of infrastructure bonds, significantly exceeding the base issue size of INR 500 crore. The bonds, offered at an annual coupon rate of 7.74%, carry a 10-year tenure and will be listed on the National Stock Exchange (NSE). This issuance attracted strong interest from domestic investors. This follows a growing trend among banks to leverage infrastructure bonds over AT-1 and Tier-2 bonds due to better pricing and regulatory exemptions from CRR and SLR requirements.
Punjab & Sind Bank recently secured INR 3,000 crore by issuing its first-ever infrastructure bonds to bolster lending in the infrastructure sector. The bank disclosed in a regulatory filing that the issuance received bids totalling INR 6,031 crore, well above the initial size of INR 500 crore. Following this, the bank accepted bids amounting to INR 3,000 crore at a coupon rate of 7.74% per annum. Advertisement
As per the Reserve Bank of India (RBI) guidelines, these 10-year bonds will be listed on the National Stock Exchange (NSE) for trading. The unsecured, subordinated, redeemable, non-convertible, taxable bonds, issued as debentures, are priced at INR 1 lakh each. Allotment to successful bidders was done on Friday.
Domestic investors have shown robust interest in such bond offerings, with several banks adopting this route to raise funds in recent months. Infrastructure bonds offer the advantage of exemption from regulatory reserve requirements, such as the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), allowing banks to utilise the proceeds entirely for lending purposes. Furthermore, these bonds are preferred over AT-1 and Tier-2 bonds due to favourable pricing.
The successful issuance of infrastructure bonds by Punjab & Sind Bank underscores the rising appeal of such financial instruments among domestic investors. By capitalising on regulatory benefits and better pricing of these bonds, banks are effectively enhancing their resource-raising strategies. This trend aligns with the banking sector's broader push to facilitate infrastructure financing, a critical pillar for economic growth.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
