Bank of India Secures Rs 2,690 Crore through Infrastructure Bonds at 7.5% Interest
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Synopsis
On February 15, the Bank of India announced it successfully raised Rs 2,690 crore through 10-year infrastructure bonds at an interest rate of 7.50%. The fundraising attracted substantial bids, showcasing strong interest in the offering.
Key Takeaways
- The Bank of India raised Rs 2,690 crore via infrastructure bonds.
- Interest rate set at 7.50% for 10-year bonds.
- Received 94 bids totaling Rs 8,845 crore.
- The funds will support infrastructure and affordable housing.
- Bank raised Rs 12,500 crore through bonds in nine months.
Mumbai, Feb 15 (NationPress) On Saturday, the Bank of India (BoI) announced a successful fundraising of Rs 2,690 crore through 10-year infrastructure bonds with an interest rate of 7.50 percent.
The funds were procured via the NSE Electronic Bidding Platform, marking the bank's third issuance of infrastructure bonds within this financial year.
The public sector bank initially aimed for a base issue size of Rs 1,500 crore, with the possibility of increasing it up to Rs 3,500 crore.
However, the offering garnered significant interest, resulting in 94 bids totaling Rs 8,845 crore, nearly six times the base issue size.
After evaluating the bids, the bank accepted 26 bids, concluding the issuance at Rs 2,690 crore.
According to the bank, the proceeds from these long-term bonds will be directed towards financing infrastructure projects and affordable housing, adhering to the guidelines set by the Reserve Bank of India (RBI).
The funds will not be earmarked for specific projects but will support the overall financing of crucial sectors, as stated by the bank.
In the past nine months, the bank has raised Rs 12,500 crore through various bond issuances.
This includes Rs 2,500 crore in Basel III Tier-II bonds issued in September at an interest rate of 7.49 percent, along with Rs 5,000 crore each in infrastructure bonds issued in July and November at rates of 7.54 percent and 7.41 percent, respectively.
Meanwhile, last month, the apex bank announced plans to inject an additional Rs 110,000 crore liquidity into the banking system through open market purchase auctions of government securities and a variable rate repo auction.
The RBI mentioned that these measures are being implemented following a review of the current liquidity and financial conditions.
