State Bank of India (SBI) has successfully raised ₹7,500 crore through its Basel III compliant Tier 2 bond issuance at a coupon rate of 6.93%. The bonds have a tenor of 10 years, with a call option after 5 years and each anniversary thereafter. The issuance received a strong response, being oversubscribed approximately 3 times, and are rated AAA by ICRA and CARE.
Tier 2 Bond Issuance
State Bank of India (SBI) has successfully raised ₹7,500 crore through its Basel III compliant Tier 2 bond issuance. The coupon rate for these bonds is set at 6.93%. This move aims to strengthen the bank’s capital base and support its growth plans for the current financial year.
Bond Details
The bonds are issued for a tenor of 10 years, providing long-term stability to SBI’s funding profile. A call option is available after 5 years and on each anniversary date thereafter, offering flexibility to the bank. The bonds have received AAA ratings from both ICRA Limited and CARE Ratings Limited, reflecting their high credit quality and low risk.
Strong Investor Response
The bond issuance attracted significant interest from investors, with bids exceeding the base issue size of ₹5,000 crore by approximately 3 times. The total number of bids received was 101, indicating broad participation from various qualified institutional bidders, including provident funds, pension funds, mutual funds, and banks. This strong demand demonstrates investor confidence in SBI and its growth prospects.
Prior Capital Raising
Earlier this year, SBI also raised ₹25,000 crore through a Qualified Institutional Placement (QIP), which was oversubscribed by more than 4.5 times. Additionally, the bank raised USD 500 million via MTN at a favorable rate for a tenor of 5 years during the financial year.
Source: BSE
