Infrastructure News

In a first, LIC plays anchor for Nabard’s infra bond sale, Infra News, ET Infra


MUMBAI: Life Insurance Corp (LIC), the country’s biggest institutional holder of marketable securities, is officially an anchor investor for an upcoming bond sale by the National Bank for Agricultural and Rural Development (Nabard), marking the first such occurrence in India’s corporate debt market.

Investment documents seen by ET showed that LIC is the anchor investor for the ₹5,000-crore infrastructure bond sale by Nabard on December 20. Besides the base, the issuer also has a green shoe option of ₹5,000 crore. As anchor investor, LIC will take up 30%, or ₹1,500 crore, of the base size of Nabard’s bond issue, the documents showed.

While the insurance major routinely buys large portions of highly-rated bond issuances, this is the first time it is being officially listed as an anchor investor, debt capital market sources said.

At present, LIC holds around 22% share of the overall bond market and 4% of the total market capitalisation in Indian equities.

“These are big developments for the corporate bond market. LIC has been active on the investment side of late because like other players such as provident funds, LIC also needs to meet its investment quota for top-rated securities,” said Venkatakrishnan Srinivasan, founder of Rockfort Fincap LLP.

“Ideally, players like LIC would like to meet their investment quotas by Jan-Feb and then focus more on government securities in the new financial year,” he said.

An email sent to LIC requesting a comment on the matter did not receive a response by the time of publication.

Nabard’s bonds are rated AAA by rating agencies ICRA and India Ratings and will mature on April 28, 2034, the documents showed.

ET had reported earlier this month that LIC had invested a little more than ₹13,000 crore out of a ₹20,000-crore bond sale by Reliance Industries in November.

  • Published On Dec 19, 2023 at 01:09 PM IST

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