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Federal Bank Raises ₹1,500 Crore in Maiden Infrastructure Bond Issuance

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Synopsis:

Federal Bank raises ₹1,500 crore through redeemable long-term infrastructure bonds. This debut issuance includes a ₹750 crore base and greenshoe option, strengthening its capital base.

Federal Bank news today

Federal Bank has successfully raised ₹1,500 crore through its maiden issuance of redeemable, unsecured long-term infrastructure bonds. The issue comprised a base size of ₹750 crore, complemented by a greenshoe option to retain oversubscription of ₹750 crore. These bonds, issued on a private placement basis, will be listed on the National Stock Exchange (NSE), ensuring regulatory compliance with SEBI’s listing norms.

Also read: EMS Secures ₹681.5 Crore JV Contract with Kolkata Municipal Corporation

FEDERAL BANK LTD

Trade

196.98-2.40 (-1.20 %)

Updated - 14 November 2024
201.70day high
DAY HIGH
196.00day low
DAY LOW
9354472
VOLUME (BSE)

Key Takeaways

  • Issue Size: ₹1,500 crore (₹750 crore base + ₹750 crore greenshoe).

  • Type of Bonds: Redeemable, unsecured long-term infrastructure bonds.

  • Purpose: Bolster capital base and support infrastructure financing.

  • Listing: Bonds to be listed on NSE.

  • Regulation Compliance: SEBI’s listing obligations and disclosure norms.

Also read: Tata Chemicals Europe to Invest ₹655 Crore in UK Sodium Bicarbonate Plant

Strategic Importance Of The Issuance

The capital raised will strengthen the Federal Bank’s capital adequacy, enabling it to focus on long-term infrastructure projects. Infrastructure bonds are crucial for supporting credit requirements in key sectors such as steel, roads, and renewable energy, aligning with national priorities for economic growth.

Details

Metrics

Total Amount Raised

₹1,500 crore

Base Issue

₹750 crore

Greenshoe Option

₹750 crore

Bond Tenure

Long-term

Listing

NSE

Market Impact And Federal Bank Share Price

The announcement of this successful bond issuance positively impacts the Federal Bank share price, reflecting investor confidence in the bank’s strategic initiatives. With this move, Federal Bank has positioned itself as a proactive player in infrastructure financing, leveraging innovative debt instruments.

The issuance also highlights the rising importance of infrastructure bonds in the Indian banking system, with leading institutions like SBI following a similar route.

Federal Bank’s maiden ₹1,500 crore infrastructure bond issuance marks a significant milestone in its growth journey. By enhancing its capital base and focusing on infrastructure financing, the bank has reaffirmed its commitment to supporting India’s development goals. The Federal Bank share price is likely to reflect this positive development, showcasing the bank’s resilience and forward-thinking strategy.

Read more: Quality Investment Holdings PCC to Sell 9.43% Stake in PNB Housing Finance 

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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