SBI raises Rs 10,000 cr via infrastructure bonds at a coupon rate of 7.49%
By Pinkerala News Desk | Sep 23, 2023
Mumbai, September 22, 2023: State Bank of India (SBI), the country’s largest lender, raised Rs. 10,000 crores today at a coupon rate of 7.49% through its fourth infrastructure bond issuance. The issue attracted an overwhelming response from investors with bids of Rs.21045.10 crores and was oversubscribed by more than 5 times against the base issue size of Rs. 4,000 crores. The total number of bids received was 134 indicating wider participation with heterogeneity of bids. The investors were across provident funds, pension funds, insurance companies, mutual funds, corporates, etc. The proceeds of bonds will be utilized in enhancing long-term resources for funding infrastructure and the affordable housing segment.
Based on the response, the bank has decided to accept Rs. 10,000 crores at a coupon rate of 7.49% payable annually. This represents the spread of 12 bps over the corresponding FBIL G-Sec par curve. Prior to this, the bank had raised long-term Bonds of Rs. 10,000 crores on 1st August 2023 at a spread of 13 bps over the corresponding FBIL G-Sec par curve. The bank has AAA credit rating with a stable outlook from all domestic credit rating agencies for these instruments. With the current issuance, the total outstanding long-term bonds issued by the bank is at Rs.39,718 crores.
This issuance is also very significant as the bank has been successful in raising long-duration bonds successively at a finer spread. We believe that this issuance may help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor.
About State Bank of India
State Bank of India is the largest commercial bank in terms of assets, deposits, branches, customers, and employees. It is also the largest mortgage lender in the country which has so far fulfilled the home buying dreams of over 30 lakh Indian families. The home loan portfolio of the bank has crossed Rs. 6.53 lakh crore. As of June 2023, the bank has a deposit base of over Rs. 45.31 lakh crore with CASA ratio of 42.88% and advances of more than Rs. 33 lakh crore. SBI commands a market share of 33.4% and 19.5% in home loans and auto loans respectively. SBI has the largest network of 22,405 branches and 65,627 ATMs / ADWMs in India with 78,370 BC outlets. The number of customers using internet banking and mobile banking stand at 117 million and 64 million respectively. With SBI’s digital strategy right on track – the bank witnessed 63% of new savings accounts opened through the integrated digital and lifestyle platform YONO in FY23. SBI observed 23,400 new digital savings bank accounts being opened per day via YONO in the quarter ended June 2023. YONO, which has more than 6.36 crore registered users, witnessed more than 1 crore average daily logins in Q1 FY24. In terms of digital lending, the bank disbursed pre-approved personal loans worth Rs. 5,428 crore through YONO in the same period. SBI also has the highest number of followers on Facebook and Twitter amongst all banks worldwide.
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