SBI raises Rs 10,000 crore through infra bond issuance

Country's largest lender State Bank of India on Monday said it has raised Rs 10,000 crore through its seventh infrastructure bond issuance.

SBI raised Rs 10,000 crore on Monday at a coupon rate of 7.23 per cent through its seventh infrastructure bond issuance, the lender said in a statement.

The issue attracted overwhelming response from investors with bids in excess of Rs 11,500 crore and was oversubscribed in excess of 2 times against the base issue size of Rs 5,000 crore, it said.

The total number of bids received was 85 indicating wider participation with heterogeneity of bids. "The investors were across provident funds, pension funds, insurance companies, mutual funds etc.

The proceeds of bonds will be utilized in enhancing long-term resources for funding infrastructure and affordable housing segments," SBI said. Based on the response, the Bank has decided to accept Rs 10,000 crore at a coupon rate of 7.23 per cent payable annually for a tenor of 15 years.

The instrument is rated AAA with stable outlook. SBI further said the issuance is also very significant as the bank has been successful in raising long duration bonds successively.

SBI Chairman C S Setty said the issuance will help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor.