State Bank of India (SBI), the largest lender in India, has successfully raised Rs 10,000 crore through an infrastructure bond issue. This achievement marks SBI’s fourth infrastructure bond issue and reflects strong investor confidence in the bank’s offerings.
Coupon Rate and Utilization of Funds
SBI will pay a competitive coupon rate of 7.49 per cent on the issued bonds. The funds raised through this issuance will be dedicated to on-lending for infrastructure projects and affordable housing, supporting critical sectors of India’s economy.
Oversubscription and Investor Profile
The initial aim of the bond issue was to raise Rs 4,000 crore, but it received an overwhelming response from the market, with the issue being oversubscribed by over five times. Notably, the bank received 134 bids totaling Rs 21,045 crore.
A diverse set of investors participated in this bond offering, including provident funds, pension funds, insurance companies, mutual funds, and corporate entities. This diverse investor profile underscores the broad appeal of SBI’s infrastructure bonds.
Competitive Pricing and Previous Issuances
The coupon rate offered by SBI for this issuance is 0.12 per cent over the corresponding FBIL G-Sec par curve. This pricing is marginally better than the rate offered in SBI’s previous infrastructure bond issuance in August 2023, which required a coupon rate of 0.13 per cent.
SBI had successfully raised Rs 10,000 crore from its infrastructure bond offering in August, bringing the total outstanding long-term bonds issued by the bank to Rs 39,718 crore. This achievement demonstrates SBI’s consistent ability to attract investors and raise funds for essential infrastructure projects.
Conclusion
SBI’s accomplishment in raising Rs 10,000 crore through its infrastructure bond sale highlights its pivotal role in supporting critical sectors of the Indian economy. The oversubscription and competitive pricing reflect the confidence that investors have in SBI’s financial offerings and its commitment to infrastructure development and affordable housing in India.
