On November 1, State Bank of India (SBI), the country’s largest public sector lender, proudly declared its success in raising ₹10,000 crore through its first Basel III compliant Tier 2 Bond for the fiscal year 2023-24.
The bank revealed that these bonds have a tenor of 15 years, with an option to call after the first decade. Investors showed immense interest in this offering, with bids totalling ₹15,907 crore, nearly four times more than the initial offering of ₹4,000 crore.
Dinesh Khara, Chairman SBI expressed that “wider participation and heterogeneity of bids demonstrated the trust investors place in the country’s largest Bank.” Further in his statement, Chairman Khara explained, “The bank has decided to accept ₹10,000 crore at a coupon rate of 7.81 percent payable annually for a tenor of 15 years with a call option after 10 years and on anniversary dates thereafter.”
It is worth noting that this marks SBI’s first Tier 2 Bond issuance in the current financial year. These instruments have been highly rated, earning a AAA rating with a stable outlook from CRISIL and India Ratings & Research Private Limited. This reflects the strong financial standing and credibility of the bank.
The positive response highlights the bank’s pivotal role in the country’s financial landscape and its ongoing efforts to secure funds for various purposes to support the nation’s growth and development. SBI continues to lead the way, and its ability to raise capital through such financial instruments sets a positive tone for the Indian financial sector as a whole.
