State Bank of India may sell infra bonds worth Rs 10,000 crore this week, and the maturity period of this security maybe 15 years.
Sources gave this information to Business Standard. Last week, the country’s largest lender SBI said that its board approved the issuance of infra bonds in the current financial year.
The bank, however, did not mention the maturity period of the bonds.
“They are looking for a 15-year bond and it will be finalized more or less soon whether it will have a tenure of 15 years or not,” said a source. If they get the nod, they will do it this week.
A source said SBI’s previous bond was at 7.53-7.57 percent. Now the infra bond can remain at around 7.60 percent.
If they go ahead with the 15-year maturity, they will map it on the electronic debt bidding platform this week.
Last time the 14-year government bond was auctioned in the primary market at a yield of 7.43 percent.
The 10-year benchmark government bond stood at 7.34 percent on Monday. Infrastructure or infra bonds are securities exempt from net demand and time liabilities (NDTL – proxy for deposits).
As such, they do not form part of the Cash Reserve Ratio and Statutory Liquidity Ratio requirements.
Apart from infrastructure projects, this amount can also be used for lending to affordable housing ventures.
SBI’s infra loan book grew by 10.81 percent year-on-year to Rs 3.67 lakh crore in September 2022.
The loan to the power sector was Rs 1.95 lakh crore, and the road project was Rs 95,614 crore.
Last month, private sector ICICI Bank raised Rs 5,000 crore through infrastructure bonds to finance projects in the power and road sectors, among others.
The interest rate on ICICI Bank’s bonds was 7.63 percent. The maturity period of the private sector bonds was fixed at seven years.
The public sector Bank of Baroda also sold infrastructure bonds recently.
