SIDBI to raise up to Rs 5,000 crore through bonds

Bonds

Small Industries Development Bank of India (SIDBI) plans to raise up to Rs 5,000 crore, which includes Rs 3,000 crore in greenshoe, through bonds maturing in three years and six months, market dealers said.

Bidding for the bonds will be held on October 17 between 11 am and 12 pm on the electronic bidding platform of the National Stock Exchange.

The pay-in date, when the exchange of money and securities takes place between the issuer and the investors, of the bond is October 19.

The bonds have 'AAA' ratings by CRISIL and CARE.

Bidding of the bonds will be for coupon setting, which the company is planning to pay annually.

Kotak Mahindra Prime Ltd on October 13 raised Rs 1,050 crore through three bonds, and Cholamandalam Investment and Finance Company raised Rs 205 crore through bonds maturing in 10 years.

Companies can borrow large sums at low interest through bonds, which allows them to invest in growth and other projects. Bonds also give companies greater freedom to operate as they see fit against bank loans which come with strings attached.