Axis Bank raises Rs 5,705 crore in infra bonds in single-largest closure

Axis Bank, the country's third largest private sector lender, on Thursday raised Rs 5,705 crore in infrastructure bonds in a single-largest closure since the instrument was introduced in July.

The senior unsecured redeemable non-convertible debentures have a maturity of 20 years and carry coupon of 8.85 per cent payable annually and will be allotted to the eligible investors on Friday, the bank said in a statement.

Axis Bank said the issue received very strong demand from pensions and provident funds, multilateral financial institutions, mutual funds, foreign financial institutions and insurers.

"We are pleased to have received a very good response for the infrastructure bonds from the domestic as well as foreign investors," said Sidharth Rath, the bank's president for treasury, business banking and capital markets.

It can be noted that the World Bank group member International Finance Corporation (IFC) had announced that a significant part of a Rs 2,000-crore rupee bond raised by it will be invested for the Mumbai-based bank's upcoming infrastructure bond.

Rath further said that though the issue was launched immediately after a US $500-million international bond offering by the bank in November, it received a good response.

The Reserve Bank of India (RBI) had in July issued the guidelines allowing banks to raise long-term money to fund longer gestation infrastructure projects.

Axis Bank's larger rival ICICI Bank was among the first ones to tap the opportunity offered by the new regulation by raising Rs 3,900 crore by selling 10-year paper at a semi-annualised rate of 9.25 per cent.