Key Points
MUMBAI, July 13 (Reuters) - India's largest lender State Bank of India (SBI) (SBI.NS) raised only the base amount in its first perpetual bond issue for fiscal 2024 as investors sought higher returns than the bank was willing to offer, merchant bankers said.. SBI raised 31.01 billion rupees ($377.87 million) via the Basel III-compliant Tier-1 bond issue at a coupon of 8.10%..
It received bids worth 59.20 billion rupees, with the highest bid at 8.42%, according to bankers...
"The investors expected a higher coupon than the secondary market trading levels and the cutoff was very low compared to the market's comfort," said Venkatakrishnan Srinivasan, founder and managing partner of debt advisory firm Rockfort Fincap...
However, bankers attributed the weak demand for SBI's issue to the bonds' 10-year call option instead of the more common five years...
Merchant bankers also said that many insurance companies were absent as they continue to await clarity on the classification of bonds from Housing Development Finance Corp (HDFC) after it merged into HDFC Bank...
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