ICICI Bank raises Rs 3,000 cr via infra bonds
For the first time in four years, ICICI Bank, India's largest private sector lender by assets, raised Rs 3,001 crore through infrastructure bonds, reflecting the emerging optimism in building ports and roads in an economy that is expected to rebound sharply as vaccinations and the slowing of infections raise hopes.
The bonds had a yield of 6.45% and a seven-year maturity. Those papers received a AAA (Stable) grade from ICRA.
Through the bidding process, at least two pension funds, LIC New Pension Scheme (NPS) and UTI NPS, as well as fund houses like Aditya Birla MF, Tata MF, and insurer Bajaj Allianz, are likely to have subscribed to those papers. About a half-dozen bids were obtained and retained by the bank.
The funds will be used to fund infrastructure projects as well as low-cost, affordable housing. In 2016-17, ICICI Bank raised Rs 4,000 crore in infrastructure bonds.
Some banks are said to have lapped up those top-rated debt securities through a bidding process only to sell down their holdings to different mutual funds including SBI, HDFC and Tata Life Insurance.
Ajay Manglunia, managing director of JM Financial's debt capital market, told the media that Infrastructure bonds have returned to the market after a long period of absence, implying that the borrower has pockets of deployments. As the unlocking programme unfolds, demand for infrastructure credit is gradually rising.
The issue's core size was set at Rs 1,000 crore, with an option to retain up to Rs 4,000 crore in subscriptions. Pension funds are more likely to have owned larger sums than mutual funds, with single bids ranging up to Rs 600 crore.
ICICI Bank's standalone net profit for the financial year ended March 31, 2021, increased by 104 % to Rs 16,192.68 crore.
The lender reported a 260.47 % year-over-year (y-o-y) increase in net profits in the January-March quarter.
Total loans increased 14% year over year (y-o-y) to Rs 7,33,729 crore on March 31, 2021, up from Rs 6,45,290 crore the previous year.