India's largest public sector bank State Bank of India (SBI), has raised Rs 10,000 crore at a coupon rate of 7.49% through its fourth infrastructure bond issuance.
According to a statement, The issue attracted an overwhelming response from investors with bids of Rs 2,1045.10 crore and was oversubscribed by more than 5 times against the base issue size of Rs. 4,000 crores.
The total number of bids received was 134, indicating wider participation with heterogeneity of bids.
The investors were across provident funds, pension funds, insurance companies, mutual funds, corporates, etc. The proceeds of bonds will be utilized to enhance long-term resources for funding infrastructure and the affordable housing segment.
Based on the response, the Bank said it has decided to accept Rs 10,000 crore at a coupon rate of 7.49%, payable annually. This represents spread of 12 bps over the corresponding FBIL G-Sec par curve, according to a bank's statement.
Prior to this, the Bank had raised Long Term Bonds of Rs 10,000 crore on 1st August 2023 at a spread of 13 bps over the corresponding FBIL G-Sec par curve. The Bank has a AAA credit rating with a stable outlook from all domestic credit rating agencies for these instruments.
With the current issuance, the total outstanding Long-Term Bonds issued by the Bank is Rs 39,718 crore. The issuance is also very significant as the Bank has successfully raised long-duration bonds at a finer spread.