SBI Raises ₹10,000 Crore through 15-Year Infrastructure Bonds at 7.54% Coupon Rate

State Bank of India (SBI) successfully raised Rs 10,000 crore through its third infrastructure bond issuance. The bonds have a tenor of 15 years and were auctioned on July 31, attracting an overwhelming response from investors.

Coupon Rate and Spread

• The coupon rate of the infrastructure bonds is set at 7.54 per cent.
• This rate represents a spread of 13 basis points over the corresponding FBIL (Financial Benchmarks India Pvt. Ltd.) G-Sec (Government Securities) par curve.

Purpose of Fundraising

• The proceeds from the bond issuance will be utilized to enhance long-term resources for funding infrastructure and affordable housing projects.
• The move aligns with SBI’s commitment to supporting development initiatives in India.

Strong Investor Response

• The issue attracted a substantial interest from investors, with total bids amounting to Rs 21,698 crore.
• The issue was oversubscribed 4.34 times against the initial base issue size of Rs 5,000 crore.
• A total of 115 bids were received from various entities, including provident funds, pension funds, insurance companies, mutual funds, and corporates.

Historical Issuances

• This marks the first issuance of a long-term bond with a 15-year tenor by any bank in the current financial year.
• Prior to this, SBI had raised infrastructure bonds worth Rs 9,718 crore on January 19, 2023, with a spread of 17 basis points over the corresponding FBIL G-Sec par curve.
• Additionally, in the previous month, the bank had raised Rs 3,101 crore via tier-I bonds (under Basel III) at a coupon rate of 8.10 per cent against an issue size of Rs 10,000 crore (including a green shoe option of Rs 7,000 crore).

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