State Bank of India Tier 3 and Tier 4 bonds which were open for subscription in the last week of February will list on Wednesday the 23rd of March. The Bank had issued these bonds in a denomination of Rs 10,000 each. There were two series which have a maturity period of 10 years and 15 years and they have a different rate of interest for QIB and HNI’s attracting lower interest and retail investors attracting higher interest.
There was also a unique oversubscription clause which capped the maximum subscription by the institutional and HNI investors and allowed the retail investors (which in this case were upto Rs 5 lacs) a substantial limit of upto Rs 9,000 crs.
The final allotment is as follows: –
QIB’s and HNI’s
| Series 3 lower tier bonds 10 years maturity, coupon rate 9.3%. | Bonds issued | 1,71,677 |
| Series 4 lower tier bonds 15 years maturity, coupon rate 9.45%. | Bonds issued | 8,28,323 |
| Series 3 lower tier bonds 10 years maturity, coupon rate 9.75%. | Bonds issued | 5,59,401 |
| Series 4 lower tier bonds 15 years maturity, coupon rate 9.95%. | Bonds issued | 39,37,595 |
The total amount raised was Rs 1000 crs in the QIB and HNI category while it was a staggering Rs 4496.99 crs in the retail category. The 15 year retail bond which has a coupon rate of 9.95% is trading at a premium of around Rs 350 in the grey market and is likely to trade even higher when trading begins tomorrow. Expect to see the bond trade at Rs 10,375 for the 9.95% bond at the bare minimum when trading begins today and the other bonds to adjust to the coupon rate accordingly.
