Kotak Mahindra Bank intends to issue bonds to raise up to Rs 2,500 crore

22 Jun 2023 , 01:09 PM

Later this week, Kotak Mahindra Bank is anticipated to issue bonds to generate up to Rs 2,500 crore, making it the first domestic bond sale by a bank this fiscal year.

On June 22, the private sector lender is anticipated to conduct a bond offering with a base size of Rs 1,250 crore and a greenshoe option worth the same sum, according to news reports. The bonds’ expected maturity date is June 2030.

In order to finance the demand for loans, banks are expected to issue bonds to raise money given the continually large disparity between credit growth and deposit growth.

According to the most recent data from the RBI, as of June 2, bank credit growth was 15.4% y/y and deposit growth was 11.8%.

Corporate debt financing has become more affordable as a result of the drop in government bond yields this fiscal year. The reference points for pricing corporate debt are government bond yields.

Despite a little increase in government bond yields during the previous week, the 10-year yield has decreased by 26 basis points since March 31.

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