Bank of Baroda raises Rs 5,000 crore through issue of 10-year bonds at 7.57%

Bank of Baroda

State-owned lender, Bank of Baroda on January 25 said it has raised Rs 5,000 crore through 10-year infrastructure bonds at a coupon rate of 7.57 percent, release said.

The Bank received a total of 128 bids amounting to Rs 14,950 crore against the total issue size of Rs 5,000 crore, the lender said in a release.

On January 23, Moneycontrol reported that Bank of Baroda will on January 24 issue infrastructure bonds worth Rs 5,000 crore maturing in 10 years.

The bonds have a base issue of Rs 1,000 crore, with retain oversubscription of Rs 4,000 crore as a greenshoe option. It is a provision in an underwriting agreement that grants the underwriter the right to sell investors more bonds than initially planned by the issuer if the demand for a security issue proves higher than expected.

The Bank said that the private placement of long-term infrastructure bonds received an overwhelming response, resulting in over-subscription which allowed it to price the issue at a competitive 7.57 percent.

“This is despite tight liquidity conditions prevalent in the market,” the release added.

The allotment of these bonds took place on 25th January 2024. The bonds are rated AAA with a Stable outlook by CRISIL and India Ratings.

On January 25, Mahindra & Mahindra Financial Services, Edel Finance Company, PCBL, Advaya Chemicals Industries, SMFG India Credit Company, L&T Finance Holdings, and Axis Finance raised funds.