SBI raises Rs. 10,000 crore via 15-year tier 2 bonds
On November 1, the State Bank of India (SBI), the nation's leading lender in terms of assets, revealed that it has raised Rs. 10,000 crore through the issuance of tier 2 bonds. These bonds carry a coupon rate of 7.81% and have a 15-year maturity period, with a first-call option available after 10 years. The offering was met with an enthusiastic response from investors, as bids reached Rs. 15,907 crore, nearly quadrupling the base issue size of Rs. 4,000 crore.
Robust response from investors
A total of 98 bids were received for SBI's tier 2 bond issuance, demonstrating considerable investor interest. This represents the first tier 2 bond offering by the bank in the current fiscal year. SBI had earlier disclosed its intention to raise up to Rs. 50,000 crore via debt instruments from both domestic and international markets during this fiscal year.
SBI's fundraising plans for FY24
The SBI board gave the green light for this fundraising effort, permitting the issuance of debt instruments in INR or other convertible currencies. These instruments encompass Long Term Bonds, Basel III-compliant additional tier 1 bonds, and Basel III-compliant tier 2 bonds, with a total value of up to Rs. 50,000 crore. They will be offered through private placement to Indian and/or overseas investors during FY24.
