State Bank of India on Wednesday raised Rs 10,000 crore through the issuance of infrastructure bonds, while two other public sector lenders – Canara Bank and Bank of India – are likely to tap the debt market next week to raise a total of up to Rs 15,000 crore through the same instrument.
SBI raised the funds through 15-year infrastructure bonds at a coupon rate of 7.36%, identical to the rate that was set at another infrastructure bond issuance on June 26, also for Rs 10,000 crore, the bank informed exchanges.
The issuance witnessed firm demand, with SBI receiving bids in excess of Rs 18,145 crore from investors such as provident funds, pension funds, insurance companies, mutual funds and corporates, the bank said. The proceeds will be used for funding infrastructure and the affordable housing segment, SBI said.
ET had reported on July 6 that SBI was likely to issue 15-year infrastructure bonds worth up to Rs 10,000 crore this week.
Canara Bank and Bank of India are likely to carry out their bond issuances around July 18-19, debt capital market sources said.
“Canara Bank’s infrastructure bond issuance will likely be of 15-year maturity and the bank is targeting a fund-raise of around Rs 5,000-Rs 10,000 crore through the bond sale,” a market source said.
Bank of India is likely to issue 10-year infrastructure bonds worth up to Rs 5,000 crore next week.
Opting for infrastructure bonds to raise funds helps lenders to manage their interest costs deftly as the money raised through these instruments is exempt from