State-owned Punjab & Sind Bank has successfully raised ₹3,000 crore through its first-ever issuance of infrastructure bonds, aimed at boosting its infrastructure lending portfolio. The bond issue received an overwhelming response, attracting bids worth ₹6,031 crore against the base issue size of ₹500 crore, as per the bank’s regulatory filing.
The bank decided to accept ₹3,000 crore worth of bids at a coupon rate of 7.74% per annum. These bonds, with a tenure of 10 years, will be listed on the National Stock Exchange (NSE) for trading.
The bonds are unsecured, subordinated, redeemable, non-convertible, and taxable, with a face value of ₹1 lakh each. The allotment to successful bidders is scheduled for Friday.
Infrastructure bonds offer banks the advantage of exemption from regulatory reserve requirements like Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR), enabling full deployment of proceeds for lending. With better pricing than AT-1 and Tier-2 bonds, infrastructure bonds are becoming a preferred choice for resource mobilization among banks.
