SBI Shares to gain focus, as lender raises Rs 10,000 crore via Unsecured Long Term Bond Issuance

State Bank of India (SBI), the country’s largest lender, raised Rs 10,000 crores at a coupon rate of 7.23% through its seventh infrastructure bond issuance. The issue attracted an overwhelming response from investors with bids above Rs 11,500 crores and was oversubscribed more than 2 times against the base issue size of Rs 5,000 crores. 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 segment.

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Based on the response, the Bank has decided to accept Rs 10,000 crores at a coupon rate of 7.23% payable annually for a tenor of 15 years. The instrument is rated AAA with a stable outlook.

This issuance is also very significant as the Bank has been successful in raising long-duration bonds successively. SBI Chairman Shri C S Setty said that this issuance will help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenors.

Shares of the PSU Bank are trading still in the red zone, below 0.6%.

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