State Bank of India (SBI) has raised Rs.100 billion at a coupon rate of 7.23 per cent through its seventh infrastructure bond issuance. The issue attracted overwhelming response from investors with bids in excess of Rs.115 billion and was oversubscribed in excess of two times as against the base issue size of Rs.50 billion.

The total number of bids received was 85 indicating wider participation with heterogeneity of bids. The instrument is rated AAA with a stable outlook. This issuance is also very significant as the bank has been successful in raising long duration bonds successively.

CS Setty, Chairman, SBI said that this issuance will help in developing a long-term bond curve and encourage other banks to issue bonds of longer tenor. Infrastructure bonds are used to finance long-term development projects.

SBI's infrastructure loans jumped 8.86 per cent in the July-September quarter. It currently has over Rs.4 trillion of outstanding loans in this sector, with the bank expecting more demand for such credit. Indian banks have raised a record Rs.740 billion through the sale of infrastructure bonds in this financial year, with SBI topping with Rs.300 billion of such notes.