State Bank of India (SBI), a leading Indian lender, reported on Friday that it has successfully raised Rs 10,000 crore through the issuance of infrastructure bonds with a 7.4% coupon rate, marking the fourth time the bank has issued such bonds.
The recent bond issuance attracted a robust response from investors, with bids reaching Rs 21,045 crore, over five times more than the base issue size of Rs 4,000 crore. The offering drew 134 unique bids from a wide array of investors including provident funds, pension funds, insurance companies, mutual funds, and corporates.
SBI intends to use the proceeds from the bond issuance to strengthen long-term resources for funding infrastructure and affordable housing projects. The bank has decided to accept Rs 10,000 crore at an annual coupon rate of 7.49%, indicating a spread of 12 basis points over the corresponding FBIL G-Sec par curve.
This follows earlier issuances where SBI raised long-term bonds worth Rs 10,000 crore in August with a spread of 13 basis points over the corresponding FBIL G-Sec par curve. Earlier in January, SBI had managed to raise infrastructure bonds amounting to Rs 9,718 crore at a spread of 17 basis points.
Infrastructure bonds are long-term debt instruments with a minimum maturity period of seven years. According to regulations set by the Reserve Bank of India (RBI), banks issuing these bonds to finance infrastructure projects are exempted from maintaining cash reserve ratio (CRR) and statutory liquidity ratio (SLR) on them.
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