ICICI Bank raises Rs 3,595 cr via infrastructure bonds, sold to pension funds, insurers

LIC Pension Funds, SBI Pension Funds and SBI Life Insurance are said to have subscribed to the papers among others. The securities offered 6.67 per cent with seven-year maturity, market sources told ET. The interest rate offered was on expected lines.

ICICI Bank did not comment on the matter at a short notice. Individual investors could not be contacted immediately.

Ratings company ICRA graded the papers with ‘triple-A’ (stable outlook).

“This strong capital position is expected to provide a cushion against any future asset quality stress and is also likely to support future asset growth,” ICRA said in a note.

Short-term investors like mutual funds mostly stayed off from the issue amid an uncertain interest rate trajectory.

“It is primarily long-term investors with whom the bank tied up to sell the infra bonds,” said a senior executive from a large financial institution.

The bank grew its loans by 17.2 per cent year-on-year to Rs 7.65 lakh crore during the July-September quarter. It has so far borrowed a total of Rs 19,500 crore through infrastructure bonds.

During the three months, net non-performing assets ratio declined to 0.99 per cent from 1.16 per cent in the preceding quarter.

“We are pretty optimistic about the economy, about the opportunity for the banking system in the two-to-three-year timeframe,” the bank said in the latest analysts’ call on earnings. “Based on the opportunities, we will see how the leverage goes up from the current levels,” it said.

Earlier in June, the bank had raised Rs 3,001 crore via infrastructure bonds for the first time in four years. Those offered 6.45 per cent with seven-year maturity.

ICICI Bank shares rose 1.1 per cent to close at Rs 760.20 on Wednesday on BSE.