Bank of Maharashtra | Photo: Wikipedia
Public sector lender Bank of Maharashtra raised Rs 811 crore through infrastructure bonds maturing in 10 years at a coupon rate of 7.80 per cent on Thursday. The bank was aiming to raise up to Rs 3,000 crore, but bids received were just around Rs 1,390 crore and that too at higher rates, said market participants. The issue had a base size of Rs 500 crore and a greenshoe option of Rs 2,500 crore.
Market participants said that investors were looking for higher rates between 7.85 per cent-7.90 per cent; however, Bank of Maharashtra decided to stick with 7.80 per cent, leading to a cap on the amount.
Market participants said that the bank received bids worth around Rs 500 crore at 7.85 per cent.
“Most of the bids were above 7.80 per cent, and they (Bank of Maharashtra) were not comfortable to pay that much,” said a dealer at a state-owned bank. “The total bids were only Rs 1,390 crore, out of which Rs 500 crore was bid at 7.85 per cent,” he added.
Canara Bank had raised Rs 10,000 crore at a coupon rate of 7.40 per cent through 10-year infrastructure bonds on July 16. The State Bank of India on July 10 raised Rs 10,000 crore also through infrastructure bonds with a 15-year tenor at a coupon rate of 7.36 per cent. SBI had raised another round of Rs 10,000 crore on June 26 at the same coupon rate.
Additionally, Bank of India sold 10-year infrastructure bonds worth Rs 5,000 crore at a coupon rate of 7.54 per cent on July 19.
Bank of Maharashtra recently raised Rs 1,000 crore by issuing Basel III-compliant Tier II bonds with a 10-year maturity and a 7.89 per cent coupon rate. Additionally, on July 18, 2024, the bank’s board approved the raising of up to Rs 10,000 crore through long-term infrastructure bonds. These funds will be raised in multiple tranches via public issues or private placements within the current financial year.
First Published: Aug 01 2024 | 7:07 PM IST
