State Bank of India triumphs with Rs 10,000cr infrastructure bond issuance

State Bank of India (SBI), the nation’s premier lender, has successfully raised a substantial ₹10,000 crores through its sixth infrastructure bond issuance. Demonstrating a robust appetite from investors, the issue was oversubscribed by approximately 3.6 times the base issue size of ₹5,000 crores, with the bank receiving an overwhelming ₹18,145 crores in bids.

The bonds, attracting a coupon rate of 7.36% payable annually, drew participation from a diverse group including provident funds, pension funds, insurance companies, mutual funds, and corporates. A total of 120 bids were recorded, indicating a wide and heterogeneous interest in SBI’s offering. This response underscores the confidence of the financial community in SBI’s creditworthiness and its pivotal role in funding key sectors.

The proceeds from this bond issuance are earmarked for enhancing long-term resources aimed at funding infrastructure projects and the affordable housing segment. This aligns with SBI’s strategy to support pivotal developmental sectors that contribute to the nation’s economic growth.

This issuance is significant not only for the amount raised but also for its potential to shape the market for long-term financial instruments. SBI Chairman, Shri Dinesh Khara, commented on the issuance’s broader impact, “This successful issuance not only aids in developing a long-term bond curve but also sets a precedent encouraging other banks to issue bonds of longer tenor.”

The successful bond issuance by SBI demonstrates the bank’s strategic foresight in capitalizing on favorable market conditions to secure long-term funding. This move is likely to have a ripple effect, encouraging similar financial strategies across the sector, which could lead to more stable funding for large-scale infrastructure and housing projects in India.