Synopsis
Shorter duration yields surged 25 basis points in the secondary market, hurting fundraising plans at public-sector banks that need more committed capital to benefit from a revival in India’s capex cycle.
Agencies
Bank of India, Punjab National Bank and Bank of Maharashtra had earlier reached out to local arrangers, seeking to raise debt of about Rs 3,500 crore - either through perpetual bonds or vanilla tier-II papers.
Lingering uncertainty over the valuation of perpetual bonds could hit fundraising at public-sector lenders such as Punjab National Bank,
Bank of Maharashtra, which plan to garner funds by selling debt instruments. While the Centre has ‘requested’ the capital-markets watchdog to review its order on the treatment of such debt, regulatory silence is making investors nervous and causing yields to harden.