SBI may issue infra bonds next week to raise Rs 10,000 crore

Infrastructure development is often touted as the key to unlocking economic growth in India, and the government has accelerated spending on roads, bridges and power projects as well as ports. A large number of this accelerated growth will be funded by funds raised through loans and infrastructure bonds, through which the debt is sold to investors. This makes the 10 year infrastructure bonds to be reportedly issued by the State Bank of India next week, an attractive asset for consistent returns.

The top public sector lender of India is eyeing as much as Rs 10,000 crore in funds from the sale of debt instruments. The issue will be launched by January 17 and the bidding might be on January 19. Infrastructure bonds by SBI are secure, considering that they have an AAA rating from India Ratings.

The coupon size for annual interest on the bonds, which will be maturing in 10 years, is expected to be between 7.55 per cent and 7.65 per cent. The bonds that SBI sold to raise another Rs 10,000 core, came with an interest of 7.51%, payable every year. Following the bond sale this month, SBI may reportedly issue more next month, to raise Rs 6,872 crore.