Indian Bank Raises ₹5,000 Crore Through Infrastructure Bonds
Public Sector Indian Bank has announced its plan to raise ₹5,000 crore through long-term infrastructure bonds, as revealed on September 26. This move aims to bolster financing for various infrastructure projects, as approved by the bank’s board. Following this announcement, Indian Bank’s shares experienced a modest increase of 1.09%, closing at ₹531.65 on the Bombay Stock Exchange (BSE). As a result, the bank’s market capitalization rose to ₹71,611 crore.
Details from Regulatory Filing
In its regulatory filing, Indian Bank specified that the board has green-lit the issuance of additional long-term infrastructure bonds to the tune of ₹5,000 crore for the financial year 2025. This is in addition to the ₹5,000 crore previously raised by the bank. The funds will be collected in one or more installments, contingent on the financing and refinancing needs of infrastructure and affordable housing projects. The bank plans to adhere to guidelines set forth by the Reserve Bank of India (RBI) and comply with all applicable laws and regulations.
Recent Trends in Fundraising by Public Sector Banks
Indian public sector banks have increasingly turned to infrastructure bonds for raising capital in recent months. Just earlier this month, Bank of Baroda successfully raised ₹5,000 crore through a 10-year infrastructure bond, offering a coupon rate of 7.26% per annum. Additionally, the State Bank of India (SBI) raised ₹10,000 crore through its fifth infrastructure bond issue back in June, showcasing a growing trend among public sector banks to tap into this funding avenue.
Stock Performance Overview
Despite a slight dip of approximately 3% in the past month, Indian Bank’s shares have recovered to yield a return of 4% over the last six months. Year-to-date, the stock has risen significantly by 25%, and over the past year, it has generated a substantial return of 24%. Impressively, investors who have held the stock for five years have enjoyed a staggering profit of about 300%, reflecting strong long-term growth potential.
Investment Considerations
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