SIDBI, Kerala Infrastructure Investment Fund to raise Rs 6,500 crore through bond issuance

SIDBI will raise up to Rs 5,000 crore, which includes Rs 3,500 crore in greenshoe, and KIIFB will raise Rs 1,499.96 crore

Small Industries Development Bank of India (SIDBI) and Kerala Infrastructure Investment Fund Board (KIIFB) will float bonds aggregating worth Rs 6,499.96 crore on December 21, market sources said.

Of the total amount, SIDBI will raise up to Rs 5,000 crore, which includes Rs 3,500 crore in greenshoe, and KIIFB will raise Rs 1,499.96 crore, as per term sheets of the institutions.

A greenshoe is an over-allotment option that allows companies to issue more bonds or raise more funds than the base issue size.

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The bonds of SIDBI will mature in 3-year-4-month-22-day or on May 14, 2027. Meanwhile, KIIFB’s bonds will mature in 10 years.

Bidding for SIDBI’s bonds will take place between 11 AM and 12 PM and KIIFB’s bonds between 3:30 PM and 5:00 PM, on the electronic bidding platform of National Stock Exchange of India (NSE) and BSE, respectively.

SIDBI has set a minimum application size of Rs 1 lakh and in multiples of Rs 1 lakh during the bidding.

The pay-in date of both these bonds is on December 22. Pay-in date is a date on which the exchange of funds and bonds takes place between issuers and investors.

KIIFB in its term sheet has said that their bonds have a fixed coupon rate of 8.95 percent or 9.25 percent XIRR. The coupon will be paid quarterly by the company to its investors.

“A step-up of 25 basis points, if the rating downgrades by a notch (i.e. AA-), And if there are two notches downgrade on the rating(A+ or below) investor has an option of 25 basis points step-up or they can exercise put option (both the options can be availed within 30 days of such rating downgrade),” KIIFB’s term sheet said.

The bonds of SIDBI have been rated ‘AAA’ by CRISIL and CARE ratings, and KIIFB’s bonds were rated ‘AA (CE)’ with a ‘Stable’ outlook by India Rating and ACUITE Ratings.

The arranger for KIIFB’s bonds is Tipsons Consultancy Services Pvt. Ltd.

Apart from this, the National Bank for Financing Infrastructure and Development (NaBFID) will also issue bonds worth Rs 10,000 crore on December 21. These bonds will mature in 15 years or on December 22, 2038.

Earlier this year, Rajkiran Rai G, Managing Director of NaBFID during an interview with Moneycontrol said that the bank is likely to tap the bond market in the third quarter of the current financial year.

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On December 20, Bank of Baroda, National Bank for Agriculture and Rural Development (NABARD), and the Indian Renewable Energy Development Agency (IREDA) will float bonds aggregating to Rs 14,500 crore.

As per the term sheet, the Bank of Baroda has a base issue of Rs 1,000 crore, with a retained oversubscription of Rs 1,500 crore. NABARD has Rs 5,000 crore each in base issue and greenshoe option.

IREDA’s bond issue consists of Rs 500 crore in base issue and Rs 1,500 crore in greenshoe.