Investors show strong interest in infrastructure financing
India’s infrastructure development plans will get a big boost from domestic bond market with the State Bank of India (SBI) raising Rs.10,000 crore during the current financial year.
The Central Board has approved issuance of Infrastructure Bonds up to Rs.10,000 crore through a public or private placement during FY2023, SBI said in a regulatory filing on 3 Jan 2023.
In Dec 2022, SBI had raised Rs.10,000 crore through its maiden infrastructure bond issuance, making it the largest single infra bond sale by any domestic lender.
Proceeds from the bonds will be for funding infrastructure and affordable housing segment.
The first issue had attracted overwhelming response with an oversubscription of 3.27 times or bids worth Rs.16,366 crore, against the base issue from 143 bids, demonstrating the confidence of the investor class.
Based on the response, the bank had decided to accept Rs.10,000 crore at a coupon rate of 7.51 per cent payable annually for a tenor of 10 years.
The coupon represents a spread of 17 basis points over the corresponding government security, indicating a high quality of credit.
NHAI InvIT (NHIT) bonds were successfully listed on the Bombay Stock Exchange and National Stock Exchange on 28 Oct 2022, raising Rs.1,500 crore through an issue of secured, rated, listed, redeemable, non-convertible debentures securities (Bonds) with a long-dated maturity of 25 years.
The Bonds were issued with a coupon of 7.9% payable half yearly, which works out to 8.05% interest for the year.
The minimum investment amount was kept low at Rs.10,000 to encourage the participation of retail investors.
NHIT Bonds received enormous interest from multiple investor classes and were called for early closure on the second day due to over-subscription, the Ministry of Road Transport and Highways said on 4 Jan 2023 in its 2022 performance review. fiinews.com
