SBI raises ₹10,000 crore via long term infrastructure bonds; check details

In a filing to the stock exchanges, the country’s largest lender said it raised the amount through its sixth infrastructure bond issuance. Following the latest round of bond issuance, the lender's total outstanding long-term bonds now stand at ₹59,718 crore.

The long term bond issuance witnessed an overwhelming response from investors, the bank informed the bourses. The investors spanned across various sectors, including insurance companies, corporates, pension funds, provident funds, and mutual funds, among others.

The AAA-rated instrument has a stable outlook. The bond issue attracted bids of more than ₹18,145 crore, justifying the overwhelming response, while being oversubscribed by nearly 3.6 times against the size of the base issue, which stood at ₹5,000 crore.

A total of 120 bids were received, which indicated a wider participation marked by heterogeneity of bids, the lender said.

The proceeds generated from the infrastructure bond issuance will be used to enhance long-term resources for funding infrastructure and affordable housing.

Led by the overwhelming response to the bond issuance, the State Bank of India will go ahead with accepting ₹10,000 crore at a coupon rate of 7.36%, which will be paid annually for a period of 15 years.

Dinesh Khara, SBI Chairman, said that the bond issuance will help develop a long-term bond curve and encourage other banks to issue bonds of longer tenor. The bank's press release stated on Wednesday that it is also significant as SBI has been successful in raising long-duration bonds successively.

Shares of the State Bank of India gained 1% to hit an intraday high at ₹858.3 per piece on the NSE in morning trade. However, the stock pared early gains and traded at ₹853.55 apiece at around 11:30 am.