State-owned Punjab & Sind Bank has successfully raised ₹3,000 crore through its maiden issuance of infrastructure bonds, which aims to bolster its infrastructure lending portfolio.
With a base size of ₹500 crore, the bond issuance garnered an overwhelming response, receiving bids worth ₹6,031 crore. The lender said in a regulatory filing that it decided to accept ₹3,000 crore at a competitive coupon rate of 7.74% per annum.
These 10-year bonds are unsecured, subordinated, redeemable, non-convertible, and taxable, with a face value of ₹1 lakh each. They will be listed on the National Stock Exchange (NSE) for trading, in line with Reserve Bank of India (RBI) guidelines. The allotment of bonds to successful bidders is scheduled for Friday.
Infrastructure bonds, which are exempt from regulatory reserve requirements such as the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), provide banks the advantage of fully deploying the proceeds for lending activities.
Also Read | Punjab & Sind Bank Launches Digital e-Bank Guarantee Facility with NeSL
In recent times, banks have increasingly opted for infrastructure bonds over AT-1 and Tier-2 bonds due to their favorable pricing. The robust demand from domestic investors highlights the growing confidence in such instruments as a viable resource-raising mechanism.
