Bank of Baroda Raises Rs 5,000 Crore through Infrastructure Bonds

The State-owned Bank of Baroda has successfully raised Rs 5,000 crore through a 10-year infrastructure bond issuance. This is the second issuance in a fortnight, following a similar Rs 5,000 crore sale on August 26. The latest bonds were oversubscribed nearly three times, priced at 7.26%.

State-owned Bank of Baroda on Monday announced a successful raising of Rs 5,000 crore through a 10-year infrastructure bond issuance, subscribed by domestic investors.

This marks the second bond issuance by the lender in a fortnight, following a Rs 5,000 crore sale on August 26 amid a surge in such activities.

The bank optimized the pricing of this issuance to 7.26 percent, 0.04 percent lower than the last, making it the tightest pricing in recent times. The issue was oversubscribed nearly three times, driven by investor feedback and interest from mutual funds, insurers, and pension funds.

With this latest issuance, the bank has reached its board-approved limit of Rs 10,000 crore for infra bonds but retains the capacity to raise an additional Rs 7,500 crore through tier-I or tier-II bonds. The official highlighted the cost-effectiveness of raising funds through bonds as opposed to deposits, which carry statutory requirements.

(With inputs from agencies.)