Punjab & Sind Bank Plans Rs 3,000 Crore Infrastructure Bond Issue
ECONOMY & POLICY

Punjab & Sind Bank Plans Rs 3,000 Crore Infrastructure Bond Issue

Punjab & Sind Bank, a state-owned institution, is set to raise Rs 3,000 crore through the issuance of 10-year infrastructure bonds, targeting the domestic capital market in mid-December. The bond issue, which has a base size of Rs 5 billion and a green-shoe option of Rs 25 billion, is rated ‘AA’ by domestic rating agencies CRISIL and IndiaRatings.

This move comes after Bank of India successfully raised Rs 50 billion via similar bonds earlier this year at a coupon rate of 7.41 percent. In FY25, commercial banks’ infrastructure bond issuances are expected to surpass Rs 1 trillion, almost doubling the total raised in FY24. To date, banks have raised approximately Rs 800 billion in FY25, compared to Rs 51,081 crore in FY24. Notably, State Bank of India has already raised Rs 30,000 crore through 15-year infrastructure bonds.

Infrastructure bonds are increasingly favored by banks as they are exempt from regulatory reserve requirements such as the statutory liquidity ratio (SLR) and cash reserve ratio (CRR). Unlike deposits, which require banks to maintain a significant portion as CRR and invest in securities, funds raised through infrastructure bonds can be fully deployed for lending activities.

The demand for infrastructure bonds is growing, with banks preferring them over high-risk instruments like AT-1 bonds and Tier-2 bonds. While AT-1 bonds feature discretionary coupon payments and loss-absorption mechanisms, Tier-2 bonds are less risky with fixed maturities and mandatory coupon payments.

Punjab & Sind Bank, a state-owned institution, is set to raise Rs 3,000 crore through the issuance of 10-year infrastructure bonds, targeting the domestic capital market in mid-December. The bond issue, which has a base size of Rs 5 billion and a green-shoe option of Rs 25 billion, is rated ‘AA’ by domestic rating agencies CRISIL and IndiaRatings. This move comes after Bank of India successfully raised Rs 50 billion via similar bonds earlier this year at a coupon rate of 7.41 percent. In FY25, commercial banks’ infrastructure bond issuances are expected to surpass Rs 1 trillion, almost doubling the total raised in FY24. To date, banks have raised approximately Rs 800 billion in FY25, compared to Rs 51,081 crore in FY24. Notably, State Bank of India has already raised Rs 30,000 crore through 15-year infrastructure bonds. Infrastructure bonds are increasingly favored by banks as they are exempt from regulatory reserve requirements such as the statutory liquidity ratio (SLR) and cash reserve ratio (CRR). Unlike deposits, which require banks to maintain a significant portion as CRR and invest in securities, funds raised through infrastructure bonds can be fully deployed for lending activities. The demand for infrastructure bonds is growing, with banks preferring them over high-risk instruments like AT-1 bonds and Tier-2 bonds. While AT-1 bonds feature discretionary coupon payments and loss-absorption mechanisms, Tier-2 bonds are less risky with fixed maturities and mandatory coupon payments.

Next Story
Technology

We’re building robots that flow, not just move

Founded in 2021, Flo Mobility is reimagining construction automation with vision-AI robots designed for seamless movement through complex sites. In conversation with CW, Manesh Jain, Founder & CEO, discusses the company’s origin, its LiDAR-free tech stack, and expansion plans in the Middle East and US.What inspired the name Flo Mobility? Why ‘Flo’ and not ‘Flow’?When we started the company in 2021, our focus was on building autonomous navigation systems for robots. Since our work centred around robot movement, ‘mobility’ naturally became part of the name. We wanted to co..

Next Story
Real Estate

We’re committed to setting benchmarks in sustainable luxury living

From a landmark land acquisition in Boisar to ambitious launches across the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru and Pune, Birla Estates is driving future-ready growth with a strong focus on sustainability, partnerships and premium living, firmly anchored in its LifeDesigned® philosophy. K T Jithendran, Managing Director & CEO, outlines the company’s premium, sustainable growth playbook in conversation with PRATAP PADODE, Editor-in-Chief, CW. Excerpts:Birla Estates recently acquired a 70.92-acre land parcel in Boisar, Maharashtra, for..

Next Story
Infrastructure Urban

Mumbai’s land crunch and ageing homes call for structured renewal

Founded in 2022, Etonhurst Capital Partners is a real-estate fund management platform focused on the Indian market. As the firm achieves the first close of Rs 1.8 billion for its debut Rs 5 billion fund, Bamasish Paul, Co-founder, Managing Partner & CEO, discusses its sharp focus on redevelopment-driven value creation in Mumbai’s urban core with CW. Excerpts:Etonhurst Capital has achieved a significant milestone with the first close of Rs 1.8 billion for its Rs 5 billion fund. What factors contributed to this early success and how do you plan to attract further investments to r..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?