Infrastructure bonds to help in solving infrastructure problems
ICICI Bank Ltd’s sale of 10-year infrastructure bonds worth about Rs 3,900 crore that insurers and pension and mutual funds (MFs) rushed to buy on Tuesday is likely to open the floodgates for banks trying to raise money to finance high-cost and long-gestation projects such as roads, ports and power plants.
At least five other banks—IDBI Bank Ltd, Axis Bank Ltd, Kotak Mahindra Bank Ltd, Yes Bank Ltd and Bank of Baroda—may raise money before the end of the month to finance infrastructure and housing projects, bankers said. Attractive yields and expectations that interest rates will eventually soften would attract insurance companies, pension funds and MFs to these instruments, they said.
The government of Prime Minister Narendra Modi has put the creation of infrastructure at the top of its agenda, as it seeks to revive economic growth that slumped to sub-5 percent levels in each of the past two years.
The building of a better infrastructure is necessary for the development of the country. This priority is finally being looked into these days more due to the infrastructure bonds.
Source: Mint
ICICI Bank Ltd, IDBI Bank Ltd, infrastructure bonds, Infrastructure problems, Kotak Mahindra Bank Ltd, Mutual funds
