State Bank of India (SBI), the country’s largest lender, raised Rs 100 billion through its maiden infrastructure bond issuance on Friday at a coupon rate of 7.51%. This is the largest single infrastructure bond issued by any bank in the country. The amount raised through these bonds will be utilized in enhancing long-term resources for funding infrastructure and the affordable housing segment. The tenor of these bonds is 10 years.
The issue attracted an overwhelming response from investors with bids of Rs 16,366 crore and was oversubscribed by about 3.27 times against the base issue. Based on the response, the bank has decided to accept Rs 100 billion at a coupon rate of 7.51% payable annually for a tenor of 10 years.
SBI Chairman Dinesh Khara said, “Development of infrastructure is a key priority for the country, and SBI, being the largest lender, has been at the forefront for the advancement of social, green and other infrastructure projects. These long-term bonds will help the bank in furthering the cause of infrastructure development”.
The bank has AAA credit rating from domestic credit rating agencies for these instruments.
Meanwhile, Khara said: “RBI’s pilot project on retail-CBDC is a game changer with durable effects that should ensure better monetary transmission at much lesser costs. The anonymity factor is critical for its acceptance. It collaborates, complements and completes the currency architecture in vogue, while also incubating further innovation.”
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