State Bank of India (SBI), the country’s largest lender, has grown ₹7,500 crore by issuing Basel III-compliant Tier-2 bonds for this fiscal year. The bonds, which have a coupon rate of 7.33% and a maturity of 15 years, come with a call option after ten years. The issue follows a parallel ₹7,500 crore bond, which was suggested in August at a higher coupon rate of 7.42%.
The latest bond issuance got a response, with bids over 3 times the base issue size of ₹4,000 crore. A total of 77 bids were raised from various groups of institutional investors, including pension funds, provident funds, mutual funds, and banks. Based on this strong response, SBI decided to accept ₹7,500 crore.
With this issue, SBI has raised a total of ₹15,000 crore through Tier-2 bonds this fiscal. The bonds are rated AAA with stable perspective by Crisil Ratings and Care Ratings, indicating strong investor confidence in the bank. SBI Chairman C.S. Shetty emphasised that the overall participation and type of bids remember investor trust in the country’s largest bank.
The funds increased through these bonds are meant to be at growing SBI’s deposit growth, which has lagged behind credit growth. The first issue before this fiscal also saw strong demand, with bids of over ₹8,800 crore coming in and 70 bids received against the original issue size of ₹5,000 crore.
This successful bond issuance highlights SBI’s strong market position and investors’ trust in its financial stability and growth opportunities.
Disclaimer
The information provided in this article is for educational purposes only. It should not be considered as financial advice. Please consult a financial advisor before making any investment decisions related to the bond market or any other financial instruments.
