On June 26, State Bank of India (SBI), the country’s largest lender, successfully raised Rs 10,000 crore through the issuance of 15-year infrastructure bonds at a coupon rate of 7.36 percent, according to market sources.
An infrastructure bond is a financial instrument used to fund the construction of infrastructure facilities.
“The bank received 11 bids at a coupon rate of 7.36 percent, totaling Rs 10,471.40 crore. However, the bank accepted only Rs 10,000 crore,” one source reported.
Additionally, SBI received bids at varying coupon rates: 10 bids at 7.38 percent, 12 bids at 7.40 percent, and 10 bids at 7.42 percent, the source added.
In total, the lender received 143 bids worth Rs 19,884.40 crore for the bonds during the bidding on the National Stock Exchange of India (NSE) electronic bidding platform.
SBI Chairman Dinesh Khara remarked, “This issuance will help develop a long-term bond curve and encourage other banks to issue longer tenor bonds.”
The bank’s investor base included provident funds, pension funds, insurance companies, mutual funds, and corporates, according to a release by the lender.
“The proceeds from these bonds will be used to enhance long-term resources for funding infrastructure and the affordable housing segment,” the release stated.
SBI had planned to raise up to Rs 10,000 crore, including Rs 5,000 crore in greenshoe, through these 15-year infrastructure bonds. The bonds have been rated ‘AAA’ with a ‘Stable’ outlook by India Ratings and ICRA.
The pay-in date for the bonds is June 27, which is when the exchange of bonds and money between issuers and investors occurs.
