SBI raises ₹9,700 crore via second infra bond

‘The proceeds will be utilised in enhancing long-term resources for funding infrastructure and the affordable housing segment’

State Bank of India (SBI) said it had raised ₹9,718 crore through its second infrastructure bond issuance on Wednesday at a coupon rate of 7.7%.

The proceeds would be utilised in enhancing long-term resources for funding infrastructure and the affordable housing segment, the bank said.

“The tenor of these bonds is 15 years,” SBI said in a statement. “The issue attracted an overwhelming response from investors with bids of ₹14,805 crore and was oversubscribed by 2.96 [times] against the base issue. The total number of bids received was 118 indicating wider participation,” it added.

The investors included mutual funds, provident and pension funds, and insurance companies, it said.

“Based on the response, the Bank has decided to accept ₹9,718 crore at a coupon rate of 7.70% payable annually for a tenor of 15 years. This represents a spread of 17bps over the corresponding FBIL G-Sec par curve,” the bank said.

“This issuance is very significant considering this is the first time an Indian bank is issuing a 15-year, long-term infrastructure bond helping the bank in long-term lending to the infrastructure segment. We believe this issue will help develop a long-term infra-bond curve and encourage banks to issue for longer tenor,” SBI added.