State Bank of India (SBI), India's largest lender, announced the successful completion of its sixth infrastructure bond issuance on Wednesday, July 10th. The offering raised ₹10,000 crore at a competitive fixed coupon rate of 7.36% with a maturity of 15 years.
State Bank of India Raises ₹10,000 Crore via Sixth Infrastructure Bond Offering
Mumbai, India – July 10, 2024 – State Bank of India (SBI), India’s largest lender, announced the successful completion of its sixth infrastructure bond issuance on Wednesday, July 10th. The offering raised ₹10,000 crore at a competitive fixed coupon rate of 7.36% with a maturity of 15 years.
Robust Investor Participation
The issuance witnessed exceptional investor demand, attracting bids exceeding ₹18,145 crore. This translates to an oversubscription ratio of approximately 3.6 times the initial base issue size of ₹5,000 crore. This strong response underscores investor confidence in SBI’s financial strength and the attractiveness of the bond’s terms. Notably, the investor base exhibited a healthy diversification, encompassing provident funds, pension funds, insurance companies, mutual funds, and corporates.
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Supporting Infrastructure and Affordable Housing
The proceeds generated from the bond issuance will be strategically allocated to augment SBI’s long-term resources for financing crucial infrastructure projects and initiatives within the affordable housing sector. This aligns with the nation’s broader economic development goals and its commitment to providing accessible housing solutions.
Expanding the Long-Term Bond Market
Given the overwhelming investor response, SBI exercised the greenshoe option, successfully placing ₹10,000 crore worth of bonds. The bonds offer a fixed annual coupon rate of 7.36% and hold a coveted AAA rating with a stable outlook, signifying minimal credit risk. This issuance further strengthens SBI’s long-term bond portfolio, bringing the total outstanding amount to ₹59,718 crore.
Strategic Significance and Industry Impact
SBI views this successful issuance as a significant step towards fostering a robust long-term bond yield curve within the Indian financial market. SBI Chairman Dinesh Khara expressed optimism that this achievement will serve as a catalyst, encouraging other financial institutions to confidently participate in issuing longer-duration bonds. This, in turn, will contribute to the overall stability and depth of the Indian debt market.
