The largest lender in the nation, State Bank of India Ltd. (SBI), said that it issued its eighth infrastructure bond on November 18th, raising Rs 10,000 crore at a coupon rate of 7.23%.
“The issue attracted an overwhelming response from investors with bids above Rs 11,500 crore and was oversubscribed more than 2 times as against the base issue size of Rs 5,000 crore,” the bank stated in a filing with the stock exchange.
The bank stated that the 85 total bids submitted showed a greater level of engagement and bid variety. “The investors included mutual funds, insurance firms, provident funds, and pension funds, among others. The bonds’ revenues will be used to improve long-term funding for the affordable housing and infrastructure sectors, according to SBI.
The bank stated that it has chosen to accept Rs 10,000 crore at a coupon rate of 7.23%, payable annually for a period of 15 years, based on the response. It stated that the instrument has a stable outlook and a AAA rating.
The bank has successfully raised long-term bonds in the past, so this offering is also highly important. C S Setty, chairman of SBI, stated, “This issuance will help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor.”
