According to analysts, Indian banks raised $2 billion through infrastructure bonds over the past two weeks in anticipation of a rebound in private capital spending and higher public spending. During this time, the market has been used by two private lenders and one state-run bank to raise money using these bonds. The greatest such offering was when State Bank of India, the largest lender in the country, raised $1.22 billion.
According to Ajay Manglunia, JM Financial’s Managing Director & Head - Investment Grade Business, as economic activity increases, there is resurgence in demand for infrastructure funds. Therefore, banks with a concentration on this industry are generating enormous sum of money that will be invested, added Manglunia. Long-term development initiatives are financed by the issuance of infrastructure bonds. Other banks that raised comparable amount of money include Kotak Mahindra Bank, which raised INR 15 billion, and ICICI Bank, which finished INR 50 billion seven-year bond issue. In the upcoming weeks, other private lenders, including Axis Bank and HDFC Bank, plan to issue infrastructure bonds as well, according to merchant bankers who spoke on the condition of anonymity because their plans had not yet been finalised.
