SBI raises ₹10,000 crore via infrastructure bonds, issue oversubscribed by around 4 times

India’s largest lender State Bank of India (SBI) on Wednesday said it has raised ₹10,000 crore at a coupon rate of 7.36 per cent through its fifth infrastructure bond issuance.

The SBI bond issue was oversubscribed by around 4 times against the base issue size of ₹5,000 crore. It attracted bids in excess of ₹19,884 crore.

The total number of bids received was 143 indicating wider participation and heterogeneity, SBI said in a statement.

Investors ranging from provident funds, pension funds, insurance companies, mutual funds, and corporations participated in the infrastructure bond issuance.

The bank said that the funds raised will be utilised in enhancing long-term resources of SBI.

Investments in infrastructure and affordable housing segments will also be made, it added.

“Based on the response, the Bank has decided to accept Rs. 10,000 crores at a coupon rate of 7.36% payable annually for a tenor of 15 years. This represents a spread of 21 bps over the corresponding FBIL G-Sec par curve,” SBI said.

“With the current issuance, the total outstanding Long-Term Bonds issued by the Bank is at Rs. 49,718 crores. This issuance is also very significant as the Bank has been successful in raising long duration bonds successively,” the bank added.

The bonds have been rated 'AAA' with a stable outlook by India Ratings and ICRA.

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

Shares of State Bank of India on Wednesday closed at ₹845.05, higher ₹3.20 or 0.38 per cent on the BSE.

As of March 2024, SBI’s deposit base was at over ₹49.16 lakh crore with a CASA ratio of 41.11 per cent and advances of more than ₹37.67 lakh crore.

SBI holds a market share of 26.5 per cent and 19.8 per cent in home loans and auto loans, respectively.