New Delhi: State-owned Punjab & Sind Bank on Wednesday raised Rs 3,000 crore from issuance of maiden infrastructure bonds aimed at expanding infra lending.
The bank received total bids of Rs 6,031 crore against the base issue size of Rs 500 crore, Punjab & Sind Bank said in a regulatory filing.
Further, it said, the bank has decided to accept bids of Rs 3,000 crore at coupon rate of 7.74 percent per annum.
In accordance with RBI guidelines, these papers with a tenure of 10 years would be listed on the National Stock Exchange (NSE) for trading.
These unsecured, subordinated, redeemable, non-convertible, taxable, fully paid-up long term bonds in the nature of debentures have a face value Rs 1 lakh each, it said.
Allotment of bonds to successful bidders would be done on Friday, it added.
Domestic investors have shown a lot of interest in such bond issuance by banks, and many lenders have exercised this option for raising resources in the recent past.
The advantage of infrastructure bonds is that they are exempt from regulatory reserve requirements such as Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). So, infrastructure bond proceeds can be fully deployed for lending activities.
Banks have been preferring infrastructure bonds over AT-1 and Tier-2 bonds, as they are better priced.
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