IDBI Bank To Raise Rs 10,000 Crore Via Long-Term Bonds
The move comes as banks have been on a spree to raise funds through infrastructure bonds because of slower deposit growth in the system.
The board of directors of IDBI Bank Ltd. approved on Tuesday raising Rs 10,000 crore through long-term bonds for financing infrastructure and affordable housing.
The bonds will be floated in the domestic market in tranches with up to Rs 5,000 crore by March 31, 2025, and balance during the financial year 2025– 26, according to an exchange filing.
The Mumbai-headquartered lender did not disclose the exact maturity, coupon rate and other details of the bond issue.
The move comes as banks have been on a spree to raise funds through infrastructure bonds because of slower deposit growth in the system.
Banks and financial institutions raise money through infrastructure bonds to finance long-term infrastructure projects. These bonds have a minimum maturity of seven years and are eligible for some regulatory exemptions, such as the mandatory requirements of the statutory liquidity ratio and the cash reserve ratio. Affordable housing loans can also be used to finance infrastructure bonds.
For the quarter ended September, IDBI Bank's profit after tax was up 39% on year to Rs 1,836 crore. Net interest income of the bank was Rs 3,875 crore, up by 26% on year.
IDBI Bank is owned by Life Insurance Corp. and Government of India, and operates as a development finance institution to provide financial services to the industrial sector.
Shares of IDBI Bank were trading 0.84% higher at Rs 76.50 apiece on the National Stock Exchange, compared to a flat benchmark Nifty at 3:15 p.m. The stock has risen 13% this year.
