SBI successfully raises Rs 10,000 crores via infrastructure bonds

MUMBAI: The State Bank of India (SBI), the country’s largest lender, achieved a milestone by raising Rs 10,000 crores through its fourth infrastructure bond issuance, garnering an enthusiastic response from investors.
The bonds were issued at a coupon rate of 7.49 per cent, further establishing SBI’s strong position in the market, the SBI said in a release.
The offering attracted a substantial response from investors, with total bids amounting to Rs 21,045.10 crores, significantly oversubscribing the base issue size of Rs 4,000 crores.
The response showcased the diversity of investors, including provident funds, pension funds, insurance companies, mutual funds, and corporates, among others.
The funds raised through this issuance will be directed towards bolstering long-term resources for funding infrastructure projects and supporting the affordable housing segment, contributing to the nation’s development.
Following the response, SBI has accepted Rs 10,000 crores at a competitive coupon rate of 7.49 per cent, payable annually.
This rate represents a spread of 12 basis points (bps) over the corresponding Financial Benchmarks India Pvt Ltd. (FBIL) Government Security (G-Sec) par curve.
Notably, the bank had previously raised long-term bonds of Rs 10,000 crores on August 1, 2023, at a spread of 13 bits per second (bps) over the corresponding FBIL G-Sec par curve.
The bank holds a AAA credit rating with a stable outlook from all domestic credit rating agencies for these instruments.
With this latest issuance, the total outstanding long-term bonds issued by SBI now stand at Rs 39,718 crores.
This achievement highlights the bank’s ability to consistently raise long-duration bonds at competitive spreads, potentially contributing to the development of a robust long-term bond curve in the market.
It is expected that the success of this issuance may encourage other banks to explore similar offerings with longer tenors, further diversifying investment options for market participants.

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