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As the impending general elections loom, prominent figures in the Indian financial landscape are mobilizing resources through bond markets to secure capital for pivotal infrastructure ventures. Renowned entities like the NABFID, along with notable public sector behemoths such as the Bank of Baroda and Canara Bank, are poised for substantial fundraising, targeting an impressive aggregate of approximately Rs 30,000 crore in the coming days. In the backdrop of a significant downtrend in government bond yields from the peaks witnessed in early October, currently resting at 7.25 percent, the timing aligns favourably for these financial manoeuvres. The 10-year benchmark bond, after touching 7.38 percent on October 6, has experienced notable ease. Government bond yields, serving as benchmarks for corporate bonds, have set the stage for these strategic financial activities. The National Bank for NABFID has set its sights on a bond sale reaching up to Rs 10,000 crore. Their proposed issuance, likely in mid-December, is slated to be of 15-year maturity, a strategic departure from their debut bond sale of Rs 10,000 crore in June, conducted through 10-year bonds. This shift aims to cater to the growing investor demand observed in the long-term infrastructure domain. Institutional heavyweights, encompassing insurance firms, pension funds, and provident funds, are expected to exhibit considerable interest in NABFID's forthcoming bonds. Simultaneously, the Delhi-Mumbai Expressway, a transformative project linking India's national capital to its financial hub, has secured a 'letter of comfort' from the National Highways Authority of India for a bond sale targeting up to Rs 3,000 crore. This proposed bond issuance, anticipated to feature a 15-year maturity with a base size of Rs 1,000 crore and a green shoe option of Rs 2,000 crore, is likely to transpire in late November or early December. In the banking sector, both Bank of Baroda and Canara Bank are positioning themselves for significant fund procurement through infrastructure bonds. The Bank of Baroda is expected to execute its Rs 10,000 crore bond issuance towards the conclusion of November, focusing on 10-year bonds. On the other hand, Canara Bank's infrastructure bonds, also designed with a 10-year maturity, are poised for bidding this week. The base size for Canara Bank's bond sale is Rs 1,000 crore, with a green shoe option worth Rs 4,000 crore. Industry insiders anticipate the pricing for these bonds to fall within the range of 7.65–7.70 percent. The heightened activity in infrastructure bond issuances by state-owned banks, exemplified by the State Bank of India's noteworthy issuances of Rs 10,000 crore each in July and September, underscores the robust demand witnessed in this financial realm. These bond sales, reflecting tight spreads with government bonds of comparable maturity, affirm the keen investor interest in supporting critical infrastructure initiatives. This collective push indicates a concerted effort to bolster essential infrastructure development across the nation, strategically leveraging the current financial landscape.
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