Infrastructure Boost: Bank Of India, Union Bank Announce Massive Fundraising
The Board of Directors of Bank of India on Thursday considered and approved the issue of Long Term Infrastructure Bonds to the tune of ₹Rs 20,000 crore during the current financial year 2025–26. The bank informed stock exchanges that the decision was taken at the meeting of the Board of Directors earlier today.
In February this year, Bank of India had raised 10-year infrastructure bonds worth ₹2,690 crore at 7.50% per annum. Other public sector banks are also lining up fund-raising plans. Union Bank of India’s board has approved raising Rs 6,000 crore through a mix of equity and debt instruments. Rs 3,000 crore will be raised through equities or rights issues, and Rs 3,000 crore via AT1 and Tier-2 bonds.
Infrastructure bonds typically have a long tenor, and the proceeds are utilised by banks to fund long-term infrastructure projects. Reportedly, banks are increasingly tapping more resources via infrastructure bond issuances in the backdrop of deposit growth lagging credit growth. Public sector banks (PSBs) reportedly accounted for a majority of the total infra bond issuances last financial year.
By 2030, India’s economy is expected to expand to USD 7 trillion from the existing USD 3.9 trillion — nearly doubling in the next six years. Infrastructure investments will play a pivotal role in enabling economic growth, as statistically, they are highly correlated.
As per a recent analysis by Knight Frank India, a 1% increase in infrastructure investment increases the economy’s GDP by 0.60%. To achieve an economic size of USD 7 trillion by 2030, India’s economy, according to Knight Frank, is required to grow at a CAGR of 10.1% between 2024 and 2030. Notably, this is the average annual growth rate China witnessed between 2000 and 2010.
To achieve a USD 7 trillion economy, India would require infrastructure investment worth USD 2.2 trillion until 2030. Bank of India shares closed at ₹116.91, up 0.65% today on the NSE.
(From ANI)
Also Read: Debt Growth In Indian Companies Slows To 2.9% Over 5 Years
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