The National Bank for Financing Infrastructure Development (NaBFID) is likely to tap debtcapital markets for the first time on June 8 to raise funds worth up to ₹10,000 crore through 10-year non-convertible debentures (NCDs).
The state-backed infrastructure lender, which was set up in 2021, is planning an issuance with a base size of ₹5,000 crore and an additional subscription option worth ₹5,000 crore, sources aware of the development said.
The bonds, rated AAA by CRISIL and ICRA will have an annual coupon pay-out. If the government holding falls below 51%, investors can avail of a put option, sources said.
“At present, PFC (Power Finance Corp) and REC (Rural Electrification Corp) bonds are around the 7.40-7.45% range. The coupon for NaBFID’s bonds could be set close to where their bonds are. It all depends on the degree of demand shown by the large institutional players like insurance and provident fund companies,” a treasury official said.
On Tuesday, the yield on the 10-year benchmark government bond closed at 6.98%. Sovereign bond yields are the benchmarks used to decide the pricing of corporate bonds.
Dealers said that following the initial issuance, NaBFID could take a pause for a couple of months before tapping debt markets again. This would help gauge the market liquidity of its debt issuance and gain insights on pricing.
In a recent interview , NaBFID’s MD Rajkiran Rai said that the development finance institution aims to raise around ₹30,000 crore through bonds in the current financial year.
Infrastructure developer L&T is looking to raise ₹3,500 crore through three sets of bond sales on June 7, sources said.
The three different tranches of bonds are likely to mature in 12 months, 15 months and 18 months, and the arranger to the issue is likely HDFC Bank, the sources said.
The yield on the 12-month bonds may be set at 7.35% while that on the 15-month paper is seen at 7.36%. The yield on L&T’s 18-month bonds is seen at 7.37%, sources said.