SBI raises ₹10,000 crore from its maiden infrastructure bonds

The amount raised through bonds will be utilized in enhancing long term resources for funding infrastructure and affordable housing segment, it said in an exchange filing. 

“The tenor of these bonds is 10 years. The issue attracted overwhelming response from investors with bids of Rs. 16,366 crores and was oversubscribed by about 3.27 times against the base issue. The issuance with 143 bids also demonstrates the confidence of investor class. This also very clearly demonstrates the maturity of Indian investors in their selection of Issuers of such instruments,” SBI said.

Based on the response, the bank has decided to accept ₹10,000 crore at a coupon rate of 7.51% payable annually for a tenor of 10 years. 
This represents spread of 17 bps over the corresponding Government of India Security, indicates high quality of credit. The Bank has AAA credit rating from domestic credit rating agencies for these instruments.

SBI Chairman Dinesh Khara said that the “Development of infrastructure is a key priority for the country and SBI, being the largest lender, has been in the forefront for advancement of social, green and other infrastructure projects. These long term bonds will help the bank in furthering the cause of infrastructure development”.

Meanwhile, on the retail e-rupee issuance by the Reserve Bank of India (RBI) from Thursday, the SBI chairman said the pilot retail-CBDC (central bank digital currency) is a game-changer with durable effects that should ensure better monetary transmission at much lesser cost.