State Bank of India Ltd (SBI), the country’s largest lender, said it raised Rs 10,000 crore on November 18 at a coupon rate of 7.23% through its seventh infrastructure bond issuance.
"The issue attracted overwhelming response from investors with bids in excess of Rs 11,500 crore and was oversubscribed in excess of 2 times as against the base issue size of Rs 5,000 crore," said the bank in a stock exchange filing.
The total number of bids received was 85 indicating wider participation with heterogeneity of bids, the bank added. "The investors were across provident funds, pension funds, insurance companies, mutual funds etc. The proceeds of bonds will be utilised in enhancing long term resources for funding infrastructure and affordable housing segment," said SBI.
Based on the response, the bank said it has decided to accept Rs 10,000 crore at a coupon rate of 7.23% payable annually for a tenor of 15 years. The instrument is rated AAA with stable outlook, it said.
This issuance is also very significant as the bank has been successful in raising long duration bonds successively. SBI Chairman C S Setty said, " This issuance will help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor."
Infrastructure bonds are used to finance long-term development projects.
SBI's infrastructure loans jumped 8.86% in the July-September quarter. It currently has over Rs 4 lakh crore of outstanding loans in this sector, with the bank expecting more demand for such credit.
Indian banks have raised a record Rs 74,000 crore through the sale of infrastructure bonds in this financial year, with SBI topping with Rs 30,000 crore of such notes.
Bankers expect another Rs 10,000 crore of infra bond issuance from the nation's largest lender in the next quarter.
With inputs from Reuters
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