State Bank of India (SBI) on Wednesday (26 June, 2024) said it has successfully raised Rs 10,000 crore through its fifth infrastructure bond issuance at a coupon rate of 7.36%.
The bond issue saw an overwhelming response, being oversubscribed by nearly four times the base issue size of Rs 5,000 crore, with bids totaling over Rs 19,884 crore.
In a regulatory filing, SBI said it received 143 bids, indicating a broad and diverse range of participants.
A diverse group of investors, including provident funds, pension funds, insurance companies, mutual funds, and corporations, participated in SBI’s infrastructure bond issuance.
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The bank further said the funds raised will enhance its long-term resources. Additionally, investments will be made in infrastructure and affordable housing segments.
According to media reports, SBI has decided to accept Rs 10,000 crore with an annual coupon rate of 7.36 percent. This rate reflects 21 basis points spread over the corresponding FBIL G-Sec par curve.
SBI also mentioned that their total outstanding long-term bonds now amount to Rs 49,718 crores. This is a significant achievement as the bank has consistently raised long-duration bonds.
The bonds have received a ‘AAA’ rating with a stable outlook from India Ratings and ICRA.
SBI will use the funds raised to boost long-term resources for infrastructure and affordable housing projects.
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SBI chairman Dinesh Khara highlighted that this issuance will contribute to the development of a long-term bond curve and encourage other banks to issue bonds with longer maturities.
On Wednesday, SBI shares closed at Rs 845.05 on the BSE, up by Rs 3.20 or 0.38%.
As of March 2024, SBI’s deposit base exceeded Rs 49.16 lakh crore with a CASA ratio of 41.11% and advances surpassing Rs 37.67 lakh crore.
SBI holds a market share of 26.5% in home loans and 19.8% in auto loans.
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