SBI raises ₹10,000 Crore via sixth infra bond issue

11 Jul 2024 , 10:52 AM

SBI, India’s largest lender, issued its sixth infrastructure bond on July 10, raising ₹10,000 Crore at a coupon rate of 7.36%.

Investors responded enthusiastically, with bids exceeding ₹18,145 Crore. The issue was oversubscribed by about 3.6 times its base size of ₹5,000 Crore.

The overall number of bids received was 120, demonstrating widespread involvement with a variety of proposals.

The investors included provident funds, pension funds, insurance firms, mutual funds, and corporations, among others.

SBI stated that the profits from the bonds will be used to increase long-term resources for funding infrastructure and affordable housing.

Based on the response, the bank has chosen to take ₹10,000 Crore at a coupon rate of 7.36% payable annually for 15 years. The instrument is rated AAA, with a stable outlook.

The bank’s total outstanding long-term bonds are ₹59,718 Crore, including the present offering.

This issuance is notable given the bank’s success in generating capital through consecutive long-term bonds, according to the lender. SBI Chairman Dinesh Khara stated that this issuance will contribute to the development of a long-term bond curve and encourage other banks to issue bonds with longer maturities.

At around 10.34 AM, SBI was trading 0.41% higher at ₹852.50, against the previous close of ₹849 on NSE. The counter touched an intraday high and low of ₹858.30, and ₹849.75, respectively.

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