SBI Raises Rs 10,000 Cr Via 15-Year Bond At 7.23%

The State Bank of India has raised Rs 10,000 crore through the issue of infrastructure bonds maturing in 15 years at a coupon of 7.23%, three people in the know told NDTV Profit.

The issue, which had a base size of Rs 5,000 crore and a greenshoe option of another Rs 5,000 crore, was fully subscribed.

The bonds are rated AAA by CARE Ratings and will be allotted on Tuesday.

SBI Capital Markets Limited is the lead manager to this bond issue.

"The issue attracted an overwhelming response from investors with bids in excess of ₹11,500 crores and was oversubscribed in excess of 2 times against the base issue size of ₹5,000 crores," according to the press release.

The bond issue garnered demand from provident funds, pension funds, insurance companies, and mutual funds.

Proceeds from the bond issue will be used in enhancing long-term resources for funding infrastructure and the affordable housing segment.

So far in the current financial year, SBI issued two batches of 15-year infrastructure bonds and raised Rs 20,000 crore at a coupon of 7.36%.

Earlier this month, Chairman CS Setty said the state-owned bank would like to access the market for infrastructure bonds as there is sizeable interest among investors. He said that the bank would tap the market to raise Rs 20,000 crore through infra bonds in the second half of the current financial year.

Banks and financial institutions raise funds through infrastructure bonds to finance their long-term infrastructure projects.

These bonds have a minimum maturity of seven years and are eligible for some regulatory exemptions, such as mandatory requirements of statutory liquidity ratio and cash reserve ratio. Affordable housing loans also qualify for lending against infrastructure bonds.