SBI raises Rs 10,000 crore via Infrastructure Bonds

5 Dec 2022 , 09:23 AM

The country’s largest lender, State Bank of India (SBI), raised Rs10,000 crore in its first infrastructure bond issuance on Friday at a coupon rate of 7.51%.

This is the country’s largest single infrastructure bond issued by any bank. The funds raised through bonds will be used to improve long-term resources for funding infrastructure and affordable housing. These bonds have a ten-year maturity.

The issue received an overwhelming response from investors, with bids totaling Rs16,366 crore, and was oversubscribed by approximately 3.27 times over the base issue.

The issuance with 143 bids also illustrates investor confidence. This also demonstrates the maturity of Indian investors in selecting the Issuers of such instruments.

Based on the responses, the bank has decided to accept Rs10,000 crore at a coupon rate of 7.51% payable annually over a ten-year period. This represents a spread of 17 basis points over the corresponding Government of India Security, indicating high credit quality.

For these instruments, the Bank has received a AAA credit rating from domestic credit rating agencies.

Infrastructure provides primary facilities that support various economic activities, facilitating the country’s growth and development through sectors such as healthcare, education, communication, transportation, and others.

The government-owned lender’s counter was trading at Rs609.60 in the early morning session, up by 0.34% from its previous closing. On Friday, the stock settled at Rs607.55 on the BSE.

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