India’s largest lender is preparing to return to the infrastructure bond market after a long break. State Bank of India (SBI) is expected to issue infrastructure bonds in March following a gap of about 16 months, according to 2 bankers familiar with the development.
The bank may issue 7-year or 10-year bonds and could raise up to ₹100 billion ($1.09 billion). The bankers shared the information on the condition of anonymity as they are not authorised to speak publicly about the matter.
When asked about the potential bond sale, SBI responded in an email to sources stating that “as a policy bank does not comment upon such matters”.
Infrastructure bonds are typically issued to fund long-term development projects, including large infrastructure initiatives that require extended financing timelines.
SBI last issued infrastructure bonds in November 2024, when it raised ₹100 billion through 15-year notes.
Fundraising through infrastructure bonds by Indian lenders has slowed significantly this financial year. So far, 3 banks have raised a combined ₹250 billion through such bonds, compared with ₹892 billion raised during the previous fiscal year.
India’s financial year runs from April to March.
Earlier in March, Bank of Baroda raised ₹100 billion through 7-year green infrastructure bonds. The issuance saw strong demand from a large state-run insurance company and a provident fund institution.
Bankers also indicated that other state-owned lenders may consider issuing infrastructure bonds before the end of the financial year as they look to raise funds for long-term projects.
($1 = ₹91.8550)
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