Axis Bank eyes Rs 3,000 cr through infra bonds

Tenure of the bonds will be 10-year and issue is priced at 8.25%

Axis Bank, the country’s third largest private sector lender, plans to raise Rs 3,000 crore by way of infrastructure bonds.

Sources said the tenure of the bonds would be 10 years and the issue would be priced at 8.25 per cent. The bond has been rated AAA by ICRA and CRISIL. The issue is open and would close for subscription on Thursday. Prior to this, the bank had raised Rs 5,700 crore by issuing long-term infrastructure bonds for a 10-year period in December last year. The coupon rate was fixed at 8.85 per cent.

The banks’ interest in raising money via long-term bonds had picked up after the Reserve Bank had last year announced that such bonds (tenor of more than seven years) would be exempted from cash and statutory reserve requirements, if the proceeds were used to fund new long-term infrastructure projects and affordable housing. Also, the loans funded via this process would be exempted from the computation of adjusted net bank credit for the purpose of calculating priority sector lending requirements.

Several banks, including CICI Bank, Kotak Mahindra Bank, Andhra Bank, IDBI Bank and Bank of Maharashtra, have raised money via infrastructure bonds.