Nabard raises Rs. 5,000 crore via 3-year bonds

Nabard raises Rs. 5,000 crore via 3-year bonds

In the first issue of fund raising through bonds in 2023, National Bank for Agriculture and Rural Development (NABARD) has raised close to Rs 5,000 crore via three-year bonds.

The coupon for the three-year bond was 7.63 per cent. The yield on government bonds with similar maturity was above 7.16 per cent.

Bonds by corporates and financial sector players carry a spread over government paper.

Bond dealers said NABARD was able to get fine rates as supply of paper in the market is low.

The issue by NABARD had a base size of Rs 2,000 crore plus a green-shoe option of Rs 3,000 crore.

Investors like pension and insurance funds are required to invest part of the corpus in public sector undertaking (PSU) bonds in line with regulations.

Meanwhile, Rural Electrification Corporation (REC) is likely to raise up to Rs 3,000 crore through a 10-year paper (maturing in January 2033). The base size is Rs 500 crore with a green-shoe option of Rs 2,500 crore.

REC is also looking at issuing medium-term paper (about 41-42 months) to raise up to Rs 3,000 crore from the market. The actual issuance would depend on market conditions.