SBI to issue Rs500-1,000 cr retail bonds in Jan

SBI to issue Rs500-1,000 cr retail bonds in Jan
PTI
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First Published: Tue, Nov 09 2010. 05 20 PM IST
Updated: Tue, Nov 09 2010. 05 20 PM IST
New Delhi: Enthused by an overwhelming response to its debut paper for retail investors, SBI plan to come out with another retail bond issue worth Rs1,000 crore in the next two months.
“We are planning for (retail bond issue) January. It would be in the range of Rs500-1,000 crore,” SBI chief financial officer SS Rajan said.
The first retail bond issue of Rs1,000 crore last month was subscribed over 17 times on the opening day itself. The bank had to curtail the subscription period as the response to the bonds was beyond anticipation.
The offering comprised issue of bonds worth Rs500 crore, with an option to raise it further up to Rs500 crore by issuing additional bonds.
The bonds were issued in two variants -- Series 1 and Series 2 having a maturity of 10 and 15 years, respectively, with a face value of Rs10,000 each. The bonds offer an interest of 9.25% for 10 years and 9.5% for 15 years.
The bonds are listed on the National Stock Exchange (NSE). The proceeds would be utilized to augment bank’s capital base in line with its growth strategy.
SBI chairman OP Bhatt had already said that the bank is likely to offer many more retail bond issues every quarter.
“Going forward, we intend to do more bond issues. We want to create a secondary market for these issues, so that exit becomes easy and price discovery takes place,” Bhatt had said, adding “over a period of time this will help us build a bigger corpus of long-term resources.”
“We believe that at present the investment opportunities for investors are very limited, which needs to be increased. This bond issue will fulfill the need to a considerable extent,” Bhatt had said.
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First Published: Tue, Nov 09 2010. 05 20 PM IST
More Topics: SBI | Retail Bonds | Investors | NSE | Money Matters |