New Delhi
India’s largest public sector bank, State Bank of India (SBI), has raised Rs 7,500 crore through its second issue of Basel III compliant tier-2 bonds for FY25. The bonds carry a coupon rate of 7.33 percent. With this, SBI has raised a total of Rs 15,000 crore so far this fiscal year through tier-2 bonds.
The bonds have a 15-year tenor with a call option after 10 years. SBI received bids worth more than three times the base issue size of Rs 4,000 crore. Seventy-seven bids were received from institutional investors such as provident funds, pension funds, mutual funds, and banks. The bonds have been rated AAA with a stable outlook by CRISIL and CARE Ratings.
The broad participation from investors is seen as a reflection of trust in the bank. SBI had earlier raised Rs 7,500 crore in August 2024 through its first tier-2 bond issuance for the financial year at a coupon rate of 7.42 percent. The funds raised are aimed at meeting regulatory requirements and supporting business growth.
SBI plans to raise up to Rs 25,000 crore through tier-1 and tier-2 bonds in FY25. With the latest bond issuance, SBI has about Rs 10,000 crore remaining for additional tier-1 bond issuances. SBI’s share price rose by 1.3 percent on Wednesday, reaching Rs 793, and its market capitalisation is over Rs 7 lakh crore.
