Infra bonds set to become more expensive for banks

Domestic lenders have raised a record ₹89,200 crore in this financial year

- Reuters

MUMBAI: Fundraising through infrastructure bonds is set to become more expensive for Indian lenders that have used them to raise record funds as investors demand higher returns amid increased debt supply.

Domestic lenders have raised a record ₹89,200 crore ($10.26 billion) in this financial year, with some, including State Bank of India, likely to tap this route before the fiscal year ends in March.

"Over the last month, demand from long-term investors has been weak, resulting in widening of spreads in the long-term corporate bond segment," said Ketan Parikh, head of fixed income at ICICI Prudential Life Insurance.