SBI mops up Rs 10,000 crore via infrastructure bonds

With the current issuance, which is the fifth in the infra series, the total outstanding long-term bonds issued by the bank stand at Rs 49,718 crore, the bank said in a statement.
SBI raises Rs 10,000 crore through infrastructure bonds at 7.36 per cent
SBI raises Rs 10,000 crore through infrastructure bonds at 7.36 per cent

MUMBAI: State Bank of India, the nation’s largest lender, has raised Rs 10,000 crore through infrastructure bond sales, at a coupon rate of 7.36 per cent.

With the current issuance, which is the fifth in the infra series, the total outstanding long-term bonds issued by the bank stand at Rs 49,718 crore, the bank said in a statement.

The issue, fifth in the infra space, has attracted an overwhelming response from investors with bids in excess of Rs 19,884 crore, or an oversubscription of around 4x against the base issue size of Rs 5,000 crore, the bank said in a statement Wednesday.

The total number of bids received was 143, indicating wider participation of investors, which included provident funds, pension funds, insurance companies, mutual funds, corporates, etc.

The proceeds of bond sales will be used to enhance long-term resources for funding infrastructure and the affordable housing segment, the bank said.

Based on the response, the bank has decided to accept Rs 10,000 crore at a coupon rate of 7.36 per cent, payable annually. This represents a spread of 21 bps over the corresponding G-Sec par curve.

The bonds are rated AAA with a stable outlook.

The issuance will help the bank in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor, chairman Dinesh Khara said.

State Bank is not only the largest commercial bank in terms of assets, deposits, branches, customers, and employees but also the largest mortgage lender with a portfolio of over Rs 7.25 trillion and has so far funded over 30 lakh families.

As of March 2024, the bank has a deposit base of over Rs 49.16 trillion and advances of over Rs 37.67 trillion. SBI has a market share of 26.5 percent in home loans and 19.8 percent in auto loans.

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