SBI plans to retain retail over-subscription of its bondsissue
"We will retain up to may be Rs 5,500-crore…the rest we will return," Bank Chairman O P Bhatt told reporters on the sidelines of an IBA conference here today.
As against an allocated Rs 1,000-crore, subscriptions from retail investors are at Rs 4,500-crore while an additional subscription of nearly Rs 4,000-crore has come from other investors including high net individuals.
"Our terms of issue is such that in the retail segment, we could take as much as we want up to Rs 10,000-crore and while from other investors we can take up to Rs 1,000-crore," Bhatt explained.
The issue, which had opened on February 21, closed yesterday. Investors were attracted to the issue because of its competitive coupon rate and the timing, which came during the end of the fiscal when individuals do tax saving investments.
This issue is part of the Rs 10,000-crore retail bond programme SBI has planned for FY 11 through FY 12. Already the bank had raised Rs 1,000-crore in the first tranche of the issue last October, which was oversubscribed 19 times. That was the first retail bond offering in the country by a corporate entity.
The bank is offering 9.75 per cent to retail investors on the 10-year bonds, and 9.3 per cent for non-retail applicants. These bonds carry a call option in the fifth year.
For the 15-year bonds, the coupon is 9.95 per cent to retail investors and 9.45 per cent to non-retail investors. These bonds have call option in the tenth year.