Power Grid, Indian Bank raise ₹5K cr each in single day

State-owned Power Grid Corporation of India Ltd (PGCIL) on Thursday raised ₹5,000 crore by selling 10-year bullet bonds at a coupon rate of 7.08 per cent.

- SUBRATA PANDA & ANJALI KUMARI

Bullet bonds are those where the principal is repaid as lump sum on maturity.

Separately, Indian Bank, also a public-sector entity, raised ₹5,000 crore through 10-year infrastructure bonds at a 7.12 per cent coupon rate, sources said.

While PGCIL's issue size was ₹1,000 crore, with a greenshoe option of ₹4,000 crore, Indian Bank's issue size was ₹2,000 crore with a greenshoe option of ₹3,000 crore. (In a greenshoe option, the underwriter has the option of issuing more shares.)

Both the bond issues have been rated "AAA" by domestic rating agencies.

Market sources suggested lack of supply from public-sector entities in the past few weeks, and pent-up demand from insurance companies, including the Life Insurance Corporation (LIC), and pension funds prompted the tight pricing of PGCIL's bond issue.