Kerala: Kerala govt arm plans bond issue of Rs 5,000 cr for infra push

These bonds are government-guaranteed bonds, which will invest in clean infra projects.

Updated: Apr 06, 2019, 09.03 AM IST


Mumbai: The

Kerala Infrastructure Investment Finance Board

(KIIFB), an investment arm of the state government, is looking to raise as much as Rs 5,000 crore through three bond issues in the next year and half to fund large and critical



IIFB, which on completed the closure of its first masala bond issue of Rs 2,150 crore last week, is also exploring the sale of $250 million ( Rs 1,730 crore) of dollar-denominated paper and an equal amount of clean infrastructure bonds, deputy managing director Sanjeev Kaushik told ET.

The investment firm, the first of its kind in the country, is exploring a domestic issue of Rs 1,500-2,000 crore as well, he said. “The appetite for our instrument was encouraging. There is a lot of demand from quality longterm institutional investors. From our side, KIIFB needs to create a large pool of capital to fund projects that will push the core infrastructure needs of the state,” Kaushik said.

KIIFB has sanctioned projects worth Rs 44,000 crore which are under various stages of execution, Kaushik said.

KIIFB is a statutory body constituted under the Kerala Infrastructure Investment Fund Act, and has a Fund Trustee Advisory Committee headed by former comptroller and auditor general Vinod Rai. Former Reserve Bank of India deputy governor Usha Thorat and Bank of India’s non-executive chairman, G Padmanabhan, are the other two members.

KIIFB closed its first tranche of masala bonds on Friday, to become the first such state government-run arm to raise capital through a bond sale done outside India but denominated in Indian rupees. Such instruments reduce currency risk to the issuer.

“These bonds are government-guaranteed bonds, which will invest in clean infra projects,” Kaushik said.

Axis Bank and Standard Chartered were the lead managers to the issue, industry sources told ET.

Though Kaushik did not name the investors, sources said Canadian pension fund CDPQ, along with two sovereign funds from the Middle East and Southeast Asia participated.

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Author: Prakash Poojary

Business Analyst

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