The country’s biggest bank, State Bank of India (SBI), on Friday (September 22) said it has raised Rs 10,000 crore at a coupon rate of 7.49 percent through its fourth infrastructure bond offering.
The bonds attracted an overwhelming response from investors, with bids totalling Rs 21,045.10 crore. This substantial oversubscription exceeded the base issue size of Rs 4,000 crore by more than five times, underscoring the strong demand for such investment instruments.
Read More: AEGF-Mastercard launch Bharat Kisan Manch portal for farmers, agri entrepreneurs
The bidding process reflected a diverse pool of investors, including provident funds, pension funds, insurance companies, mutual funds, and corporate entities, showcasing broad market participation and a spectrum of investor interests.
The funds raised through these bonds will be channeled into bolstering long-term resources dedicated to funding critical infrastructure projects and the affordable housing segment, contributing to the nation’s development and economic growth.
Read More: CSB Bank enters into partnership with Daimler India for vehicle financing
In light of the enthusiastic response, SBI has decided to accept Rs 10,000 crore at the coupon rate of 7.49 percent, payable annually. This rate represents a spread of 12 basis points (bps) over the corresponding FBIL G-Sec par curve.
This achievement follows the bank’s previous successful issuance of long-term bonds worth Rs 10,000 crore on August 1, 2023, at a spread of 13 bps over the corresponding FBIL G-Sec par curve.
SBI enjoys a pristine AAA credit rating with a stable outlook from all domestic credit rating agencies for these financial instruments. The current offering adds to the bank’s outstanding long-term bonds portfolio, which now stands at Rs 39,718 crore.
Read More: RBI to tighten wilful defaulter norms, six-month deadline for banks to act
“This issuance is also very significant as the bank has been successful in raising long-duration bonds successively at a finer spread. We believe that this issuance may help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor,” the bank added.
Shares of State Bank of India ended at Rs 598.10, up by Rs 9.80, or 1.67 percent, on the BSE.
