Bank of Baroda to issue infrastructure bonds of up to ₹5,000 crore in first tranche

Bank of Baroda on Friday (November 24) said it has decided to issue infrastructure bonds of up to ₹5,000 crore in the first tranche for a tenure between seven to 10 years. The announcement follows the lender's earlier disclosure of intending to raise infrastructure bonds amounting to ₹10,000 crore. This initial tranche comprises a base issue of ₹1,000 crore, supplemented by a green shoe option of up to ₹4,000 crore, Bank of Baroda said.

Infrastructure bonds serve as crucial financial instruments utilised by various entities within India, including governments, banks, and authorised infrastructure companies. They play a pivotal role in funding diverse developmental projects across the nation.

Typically, they come with a lock-in period of five years during which investors cannot sell the bonds However, post the lock-in period, investors have the flexibility to trade these bonds on stock exchanges like the National Stock Exchange (NSE) or BSE.

Participation in infrastructure bond investments is open to all Indian citizens above 18 years of age, as well as Hindu Undivided Families (HUF).

Experts say that issuance of these bonds fuels infrastructural development and presents a decent investment avenue for individuals seeking stable returns.

Investors require a Demat account and a PAN to trade in infrastructure bonds. They can apply for these bonds in the physical form too and require a self-attested PAN card. They need to have identity and address proof as part of the KYC (Know Your Customer), procedure.

At the time of writing this report, the shares of Bank of Baroda were trading 0.05% higher at ₹194.40 on the BSE.