ICICI Bank raises Rs 5,000 cr infrastructure bonds for funding projects

13 Dec 2022 CW Team

ICICI Bank, a private sector lender, has raised Rs 50 billion through infrastructure bonds to fund projects in sectors such as power and roads.

The coupon on seven-year paper was set at 7.63 percent, about 25 basis points higher than the yield on government benchmark bonds of comparable maturity. This fundraise came a day after the Reserve Bank of India's Monetary Policy Committee decided to raise the policy repo rate by 35 basis points to 6.25 percent.

ICICI Bank's infra bonds had a base issue size of Rs 10 billion, with a greenshoe option of Rs 40 billion. Investors bid close to Rs 200 billion for the issue, according to debt market sources.

In addition to ICICI, banks that raised funds through infrastructure include Bank of Baroda and the country's largest lender, State Bank of India. SBI raised Rs 10,000 crore last week with its first issue of 10-year infrastructure bonds with a coupon of 7.51 percent.

In the current fiscal year, lenders have raised a total of Rs 196 billion through infra bonds (Fy23). In fiscal year 22 (FY22), Indian lenders such as Axis Bank and HDFC Bank raised over Rs 270 billion through infra bonds.

CRISIL has assigned a "AAA" credit rating to ICICI Bank's infrastructure bonds. According to an analyst presentation, its outstanding infrastructure bond borrowings stood at Rs 408.24 billion at the end of September 2022, up from Rs 223.14 billion the previous year.

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