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SBI raises ₹10,000cr via infrastructure bonds at 7.49%
September 25, 2023
State Bank of India (SBI) has raised ₹10,000 crore through 15-year infrastructure bonds priced at a rate of 7.49 per cent. The pricing was five basis points cheaper than coupon fixed at 7.54 per cent for such bonds issued in July.
The yield was 7.7 per cent for infrastructure bonds the bank issued in January.
Bond market dealers said the softening of yields in markets helped SBI to fix coupon at a lower rate. The response for those looking for long-term paper was good and the issue attracted bids in excess of ₹20,000 crore. The Employee Provident Fund Organisation (EPFO) and insurance companies were major investors.
The bond offer had two components: base issue size of ₹4,000 crore and a greenshoe option of ₹6,000 crore.
SBI executives said the new pricing was better than the July offering. The spread over the 15-year India government bond was 12 bps this time as against 13 bps in July.
While news on Friday about India’s inclusion in India in JP Morgan GBI-EM index had little impact, the future issuances of SBI bonds would certainly benefit in the form of cheaper cost of money, they said.
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