📷 Image Credits: Moneycontrol
State Bank of India (SBI), India’s largest lender, recently raised Rs 10,000 crore through its sixth infrastructure bond issuance, with a coupon rate of 7.36 percent and a tenor of 15 years. This move by SBI garnered strong interest from investors, as the bond issue was oversubscribed by around 3.6 times, with bids exceeding Rs 18,145 crore. The successful issuance of these bonds will provide funding for infrastructure and affordable housing projects, contributing to the development of key sectors in India.
The funds raised through this bond issuance will help SBI in enhancing long-term financial resources for vital sectors like infrastructure and affordable housing. The bank received significant support from a diverse range of investors, including provident funds, pension funds, insurance companies, mutual funds, and corporates. With this issuance, SBI’s outstanding long-term bonds now stand at an impressive Rs 59,718 crore, showcasing the bank’s commitment to financing crucial projects.
Furthermore, the response from the market was positive, as SBI shares witnessed an increase in value post the bond announcement. The share price of SBI opened 0.65% higher on Thursday, touching a high of Rs 856.45. The market capitalization of the bank rose to Rs 7.64 lakh crore, reflecting investor confidence in SBI’s financial stability and growth prospects.
In addition to the financial success of the bond issuance, SBI’s Chairman Dinesh Khara highlighted the significance of developing a long-term bond curve. This move by SBI will not only encourage other banks to issue bonds with longer tenors but also contribute to the overall growth of the bond market in India. The bank’s continued efforts in raising long-duration bonds demonstrate its strategic approach towards strengthening its financial position.
Overall, SBI’s recent infra bond issue signifies a positive development in the financial landscape of India, showcasing investor confidence in the bank and contributing to the growth of key sectors. The successful bond issuance aligns with SBI’s commitment to supporting infrastructure and affordable housing projects, further solidifying its position as a key player in India’s banking and financial industry.
