Mumbai: State Bank of India (SBI), the country’s largest lender, successfully raised Rs 10,000 crore through 15-year infrastructure bonds at a coupon rate of 7.36% with annual payments.
According to SBI, the funds from these bonds will be allocated towards bolstering long-term resources for financing infrastructure projects such as highways, power plants, and affordable housing segments.
The bond issue garnered significant investor interest, oversubscribing by approximately four times compared to the base issue size of Rs 5,000 crore, as reported in a regulatory filing by SBI.
SBI Chairman Dinesh Khara highlighted that this issuance will facilitate the development of a robust long-term bond market, encouraging other banks to consider issuing bonds with extended tenures.
Notably, proceeds from infrastructure bonds are exempt from regulatory reserve requirements like Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR), enabling the entire amount to be utilized for lending purposes to generate interest income.
Given the rapid expansion of the Indian economy, there is escalating demand for funds to support infrastructure projects characterized by prolonged gestation periods.
