Indian Bank has secured necessary board approvals to raise approximately ₹5,000 crore from the bond market through infrastructure bonds by the end of March 2026. According to reports from The Hindu BusinessLine, Managing Director and CEO Binod Kumar confirmed that the board approved the fundraising proposal on Wednesday, following an enabling approval granted during the financial year. The Chennai-headquartered public sector bank identified the current period as an opportune time, having identified suitable investors and observing good appetite to complete the funding by month-end.
The infrastructure bond fundraising is primarily aimed at supporting infrastructure lending activities, with the bank seeing strong demand for infrastructure credit, particularly in green finance, battery storage, data centre, and other projects. As reported by The Hindu BusinessLine, Kumar emphasized that the bank felt the current period presented the right opportunity to tap the bond market. This marks Indian Bank's first bond market tapping in the current fiscal year, following its previous ₹5,000 crore raise through 10-year infrastructure bonds in October 2024.
Indian Bank's fundraising initiative aligns with broader trends among public sector banks, as reported by The Hindu BusinessLine. Other PSU banks including Union Bank of India, Bank of Baroda, Bank of India, and State Bank of India have also undertaken similar fundraising activities. Analysts attribute this increased activity to significant demand and appetite for infrastructure lending to support long-term projects, especially in the renewable energy space. The banks had not previously tapped bond markets for the first eight months of the current fiscal year, but have since witnessed a notable pickup in such activities.
Infrastructure bonds offer significant advantages over other funding mechanisms due to their exemption from mandatory reserve requirements of Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR), allowing banks to deploy the entire capital for lending purposes. According to The Hindu BusinessLine, this regulatory framework has contributed to the increased interest in infrastructure bond fundraising among PSU banks. The current fundraising environment reflects banks' strategic shift toward infrastructure financing, supported by strong demand in the renewable energy sector and other long-term project requirements.
