Indian Bank has raised ₹5,000cr via bonds in India
What's the story
State-owned Indian Bank has raised ₹5,000 crore by issuing 10-year infrastructure bonds at a coupon rate of 7.15%. The move comes as part of the bank's strategy to improve liquidity amid slow deposit growth and high costs of bulk deposits. Institutional investors such as EPFO were reportedly in talks to participate in this bond sale which also included a greenshoe option for additional demand.
Financial strategy
Bonds rated 'AAA' by CARE and CRISIL
The infrastructure bonds issued by Indian Bank have been rated 'AAA' with a 'Stable' outlook by both CARE and CRISIL. This high rating indicates the safety and reliability of these bonds. The bank's decision to issue such bonds is seen as a strategic move to lend more affordably to large projects, as they are exempt from certain reserve requirements (CRR and SLR).
Market trends
Banks have raised ₹25,000cr through infrastructure bonds in FY26
So far in FY26, banks have raised about ₹25,000 crore through infrastructure bonds. This is a significant drop from the previous fiscal year (FY25), when ₹89,200 crore was raised. The decline indicates a shift in fundraising strategies across the banking sector. Indian Bank's successful bond sale is part of this trend and highlights how banks are adapting their financial strategies to changing market conditions.