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SBI raises Rs 10,000 crores through Tier II bonds to fund its business growth

India’s No. 1 bank said this is its first Tier II bonds in the current fiscal year. They form part of the bank’s Tier II capital which comprises certain reserves and certain types of subordinated debt

Our Special Correspondent Mumbai Published 02.11.23, 11:52 AM
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State Bank of India (SBI) has mopped up Rs 10,000 crore through Tier II bonds to fund its business growth.

The country’s largest lender said the Basel III-compliant bonds were mobilised at a coupon rate of 7.81 per cent. They carry a tenor of 15 years, with the first call option after 10 years.

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India’s No. 1 bank said this is its first Tier II bonds in the current fiscal year. They form part of the bank’s Tier II capital which comprises certain reserves and certain types of subordinated debt.

The issue attracted an overwhelming response from investors with 98 bids worth Rs 15,907 crore, oversubscribed almost four times against the base issue size of Rs 4,000 crore.

``Wider participation and heterogeneity of bids demonstrated the trust investors place in the country’s largest bank,’’ bank chairman Dinesh Khara said.

The latest fundraising comes after the lender mobilised a similar amount through infrastructure bonds, which was its fourth such issuance in this financial year. These bonds were raised at a coupon rate of 7.49 per cent.

It also saw a strong response from investors with bids of Rs 21,045.10 crore and was oversubscribed by more than five times against the base issue size of Rs 4,000 crore.

SBI used the proceeds to fund infrastructure and the affordable housing segment.

Before this issuance, the bank had raised long-term bonds of Rs 10,000 crore on August 1, 2023, and Rs 9,718 crore on January 19, 2023.

The bank has a AAA credit rating with a stable outlook from all domestic credit rating agencies for such instruments.

SBI reported its best quarterly profit at Rs 16,884 crore in the April-June period.

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