SBI raises Rs. 9718 crores through infrastructure bond issue

State Bank of India (SBI), the country's largest lender, has raised Rs. 9,718/- crores through its second infrastructure bond issuance on Wednesday at coupon rate of 7.70 per cent. The proceeds of bonds will be utilized in enhancing long term resources for funding infrastructure and affordable housing segment. The tenor of these bonds is 15 years. The issue attracted overwhelming response from investors with bids of Rs. 14,805/- crores and was oversubscribed by about 2.96 times against the base issue. The total number of bids received was 118 indicating wider participation. The investors were across mutual funds, provident & pension funds & insurance companies.

Based on the response, the Bank has decided to accept Rs. 9,718/- crores at a coupon rate of 7.70% payable annually for a tenor of 15 years. This represents spread of 17 bps over the corresponding FBIL G-Sec par curve. Prior to this, the Bank had raised infrastructure bonds of Rs. 10,000/- crores on 6th December 2022 at a spread of 17bps over the corresponding FBIL G-Sec par curve. The Bank has AAA credit rating from domestic credit rating agencies for these instruments.

This issuance is also very significant as this is the first time any bank in India is issuing a 15 years Long term infra bond and it will help the bank in lending long term to infrastructure. We believe that this issuance may help in developing a long term infra bond curve and encourage banks to issue longer tenor.

Shares of State Bank of India was last trading in BSE at Rs. 591.40 as compared to the previous close of Rs. 592.95. The total number of shares traded during the day was 322537 in over 10380 trades.

The stock hit an intraday high of Rs. 597.10 and intraday low of 587.85. The net turnover during the day was Rs. 190729606.00.

Source : Equity Bulls

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StateBankofIndia INE062A01020 SBIN FundRaising InfrastructureBonds