SBI Raises Rs 10,000 Crore through Infrastructure Bonds

7 Aug 2023 , 01:22 PM

State Bank of India (SBI), India’s largest lender, announced the successful raising of Rs 10,000 crore by issuing 15-year infrastructure bonds at a coupon rate of 7.54%.

The proceeds from the bond issuance will be directed towards bolstering long-term resources for funding critical infrastructure projects and supporting the affordable housing segment.

SBI witnessed overwhelming investor interest, with bids amounting to Rs 21,698 crores, a remarkable 4.34 times the base issue size, indicating robust demand for these financial instruments.

The bank attracted investors from diverse sectors, including provident funds, pension funds, insurance companies, mutual funds, and corporates.

SBI’s high credit rating of AAA with a stable outlook, as evaluated by domestic credit rating agencies, signifies the bank’s strong reliability and low risk of default on these instruments.

The bank offered bonds at an interest rate slightly better than the rate offered by standard government bonds, issuing the bonds at a spread of 13 basis points (bps) over the standard government bond rates.

The successful issuance of these infrastructure bonds reflects the confidence and trust investors place in SBI’s financial stability and the bank’s commitment to supporting crucial infrastructure initiatives in the country.

 

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