Winning Bizness Desk
Mumbai. Country's largest and biggest commercial bank State Bank of India (SBI) has raised Rs 10,000 crore through 15-year infrastructure bonds, to which SBI will provide funds to projects in sectors like power and road. The coupon rate for the bond has been fixed at 7.36%. According to the insiders, this issue has received almost four times more subscription than the base issue size of Rs 5,000 crore. Earlier, SBI had placed a 15-year infrastructure bond at a coupon of 7.49% in September 2023 and raised Rs 10,000 crore. "The amount raised from the bond will be used to raise long-term resources to fund the infrastructure and affordable housing segments. The bank's board has already approved a plan to raise up to Rs 20,000 crore through long-term bonds in the current financial year. Out of this, Rs 10,000 crore has been raised through the current offering," said a statement issued by SBI.
SBI: The largest government bank
SBI has said that this instrument has been given AAA rating with stable outlook and with the current issue, the total outstanding long-term bonds issued by the bank is Rs 49,718 crore. Notably, the SBI's stock closed at Rs 844.25 on Wednesday, up 0.24%. With this, the market cap of the bank has gone up to Rs 7.53 lakh crore. Notably, State Bank of India is the largest government bank in the country. The government has a 56.92% stake in SBI. It was established on 1 July 1955. Headquartered in Mumbai, this has more than 22,405 branches and more than 48 crore customers. The bank operates in 29 countries of the world with 235 branches outside India.
What does SBI have to say?
Commenting on the developments, SBI's CMD Dinesh Khara said that this issue will help in developing a long-term bond curve and will also encourage other banks to issue long-term bonds. The total number of bids received was 143. The investors were from Provident Funds, Pension Funds, Insurance Companies, Mutual Funds, Corporates etc. A few days ago, the board of State Bank of India (SBI) approved raising up to $ 3 billion (Rs 25,073 crore) through loans in FY 2025. The country's largest lender SBI gave this information in a stock exchange filing.
SBI had said that the bank would raise funds in one or more tranches through a public offer or private placement of senior secured notes, which would be in US dollars or any other major foreign currency. In January, SBI raised Rs 5,000 crore by selling 'Basel III-compliant additional tier-I perpetual bonds'. SBI's profit in the fourth quarter (January-March) of FY 2023-24 rose 23.98% year-on-year to ₹ 20,698 crore. In the same quarter a year ago, the government bank had reported a net profit of ₹ 16,695 crore.
