SBI RAISES RS 7,500 CRORE VIA BASEL III COMPLIANT TIER-2 BONDS AT 7.33% COUPON RATE

India’s largest public sector lender State Bank of India (SBI) has raised Rs 7,500 crore through its second issue of Basel III compliant tier-2 bonds for FY25, at a coupon rate of 7.33 percent, it said on Wednesday, 18 September. With this, SBI has raised a total of Rs 15,000 crore so far in this fiscal year via issue of tier-2 bonds.

SBI bonds, which carry a 15-year tenor with a call option after 10 years, received bids over three times the base issue size of Rs 4,000 crore. A total of 77 bids were submitted from a diverse set of institutional investors, including provident funds, pension funds, mutual funds, and banks, the lender said in a stock exchange filing. The bonds are rated AAA with a stable outlook by both CRISIL and CARE Ratings.

SBI Chairman C S Setty highlighted that the broad investor participation underscores the trust placed in the bank.

Earlier reports indicated that this issuance could be SBI's final tier-2 bond sale for the financial year, with the funds aimed at meeting regulatory requirements and supporting business growth.

In August 2024, SBI had raised another Rs 7,500 crore through a 15-year tier-2 bond issuance at a coupon rate of 7.42 percent. This was the bank's first Basel III compliant bond sale for FY25. The issuance was part of SBI's broader plan to raise up to Rs 25,000 crore through tier-1 and tier-2 bonds to meet regulatory capital requirements and support growing credit demand.

With the latest bond sale, SBI has utilised a significant portion of its approved limit, leaving room for around Rs 10,000 crore in additional tier-1 (AT-1) bond issuances for the current financial year.

SBI share price rose 1.3 percent on Wednesday, to Rs 793 in the afternoon trade. The company’s market capitalisation is well over Rs 7 lakh crore at the latest share price. SBI stock has jumped nearly 24 percent so far this year since January, outperforming benchmark NSE Nifty 50, which has gained about 17 percent during the period.

2024-09-18T09:59:37Z dg43tfdfdgfd