The bonds will be raised by the Ministry of New & Renewable Energy through the Indian Renewable Energy Development Agency during the 2017-18.
The bond issue carries a 6.00 per cent interest rate with a 3.75-year maturity, falling due in February 2021, the multilateral lending said in a statement. It further said that the bonds, which are denominated in Indian rupees but settled in US dollars, were underwritten by JP Morgan and TD Securities as Joint Lead Managers.
There is a dichotomy between what the data is telling you and what the RBI is doing. The data is saying that inflation is under control, says Sivakumar
The bonds allotted are perpetual in nature, meaning there is no maturity period and it can be converted to equity as well.
With RBI unlikely to change rate or inflation expectations, the possibility of the yield falling is remote, according to experts.
The domestic currency opened at 64.05 and quickly breached the 64 mark to touch an intraday high of 63.97, as custodian banks, corporates and nationalised banks sold the dollar in early trade. However, month-end buying pushed the rupee back to 64.10 levels.
The rupee pared some of its gains from earlier in the session to end at 64.11 to the dollar, up 25 basis points from the previous close, as investors remained cautious ahead of the announcement of US president Donald Trump’s new tax plan.
Market participants said that foreign banks were selling dollars in order to enable their foreign portfolio investor clientele to invest in Indian securities.
Market participants said that the weakness in the rupee can be attributed to profit booking by investors ahead of the first round of the presidential election in France.
The biggest buyers of the day were state-owned banks, who were looking to buy dollars when USD-INR was at the 64.60 level.
"The Board of Directors, in its meeting held on April 19, 2017, has accorded approval for updating and upsizing the USD 4 billion MTN (medium term note) programme up to USD 6 billion for raising debt from international markets to part finance capital expenditure on new/ongoing projects, coal mining projects, renovation and modernisation of power stations and for other permissible end uses," it said in a BSE filing.
FPIs have been heavily buying into Indian capital markets since the beginning of the calendar year. In all, they have invested around USD 6.5 billion in domestic equities and around USD 7 billion in debt so far.
The domestic currency was also weighed down by minor outflows of funds by foreign portfolio investors.
In a BSE filing it said the bank was intended to raise up to Rs 600 crore through issuance of additional tier I bonds.
Public sector United Bank of India has raised Rs 200 crore to add up to its tier-I capital under Basel III regulations.
"The bank proposes to raise funds through issue of Basel III compliant additional tier I up to Rs 1,000 crore and Basel III compliant tier II bonds up to Rs 500 crore during 2017-18 in one or more tranches," it said in an exchange filing.
"Board of our Bank is considering a proposal for issue of tier II bonds for inclusion in Tier II Capital of face value of Rs 10 lakhs each aggregating to Rs 1,000 crore to LIC of India," UCO Bank said in a BSE filing.
State-owned Bank of India has raised Rs 1,000 crore through issue of bonds compliant with globally accepted Basel III standards.
We expect the 10-year benchmark bond yield to trade in a range of 6.85-6.90 percent for the day, says Mohan Shenoi, Kotak Mahindra Bank.
We expect the 10-year benchmark bond yield to take some cues from the USD-INR movement and trade rangebound between 6.82-6.86 percent, says NS Venkatesh, Lakshmi Vilas Bank.
Based on the US treasury yield trajectory and the heightened probability of a Fed rate hike this month, gilts are expected to show a reversal of the rally and trade with a weak bias, says Ajay Manglunia, Edelweiss.
Public sector Punjab National Bank (PNB) has raised Rs 1,500 crore additional tier-I capital by issuing bonds on private placement basis.
Yields have fallen 13 basis points over the past two days as shortsellers scramble for cover.
We expect the 10-year benchmark bond yield to trade broadly in the 6.80-6.90 percent range in the near term, says Ashutosh Raina, HDFC Bank.
We expect the 10-year benchmark bond yield to trade in a broad range of 6.9-7.1 percent in the near term, says Tirthankar Patnaik, Mizuho Bank.