New Delhi: State-owned Punjab and Sindh Bank on Wednesday raised Rs 3,000 crore by issuing its first infrastructure bond aimed at expanding infrastructure lending. Punjab and Sindh Bank said in a regulatory filing that the bank received total bids of Rs 6,031 crore against a base issue size of Rs 500 crore.
Also, the bank has decided to accept a bid of Rs 3,000 crore at a coupon rate of 7.74 per cent per annum.
As per RBI guidelines, these documents of 10 years tenure will be listed on the National Stock Exchange (NSE) for trading.
These are unsecured, subordinated, redeemable, non-convertible, taxable, fully paid long-term debentures in the nature of face value of Rs 1 lakh each, it said.
Allotment of bonds to successful bidders will be done on Friday, it added.
Domestic investors have shown great interest in banks issuing such bonds, and many lenders have recently used this option to raise funds.
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 utilized for borrowing activities.
Banks are preferring infrastructure bonds over AT-1 and Tier-2 bonds, as they are priced better.