Private sector lender ICICI Bank is planning to raise up to Rs 8,000 crore through infrastructure bonds to finance projects in the transport and power and affordable housing sectors.
Debt market sources said while the private lender is raising up to Rs 8,000 crore in the current round, rating agency CRISIL has assigned “AAA/Stable” for Rs 10,000 crore of bonds. Lenders have always an option to raise money in tranches.
The issue size is Rs 500 crore with a green shoe of Rs 7,500 crore. The interest rate scenario is unclear due to volatility in markets. The highly rated long-term paper (10-year) from corporate would see a coupon of around 7.25-30 per cent range, bond dealers said.
ICICI Bank did not respond to email queries on the fundraising. The bank’s exposure to road, ports, telecom, urban development, and other infrastructure stood at Rs 48,981 crore at the end of March 2021, according to its annual report for FY21.
Funds raised through this route are exempt from liquidity norms cash reserve ratio and statutory liquidity ratio requirements and are deployed in long-term infra and affordable housing credit.
CRISIL, in its rating review, said the bank actively finances projects for capacity creation in environment-friendly sectors like renewable energy and other sustainable sectors.