State Bank of India Raises ₹4,691 Crore via AT1 Bonds at 7.75% Coupon
State Bank of India (SBI), the country’s largest public sector bank, has successfully raised ₹4,691 crore through the first tranche of its Basel III-compliant Additional Tier 1 (AT1) bonds for the current financial year. The issuance witnessed robust participation from institutional investors, reflecting strong market confidence in SBI’s financial strength and capital position.
The fundraising exceeded the initial base issue size, highlighting healthy demand from a diversified investor base.
Key Highlights of the Bond Issue
SBI’s inaugural AT1 bond issuance for the financial year recorded strong subscription levels.
- Amount Raised: ₹4,691 crore, against a base issue size of ₹3,000 crore.
- Coupon Rate: 7.75% per annum, payable annually.
- Instrument: Basel III-compliant Additional Tier 1 (AT1) perpetual bonds.
- Call Option: Exercisable after five years and on every subsequent anniversary thereafter.
- Credit Rating: AA+ (Stable Outlook) assigned by both CRISIL Ratings and CARE Ratings.
- Investor Interest: The issue received 89 bids, with total demand exceeding twice the base issue size.
The oversubscription reflects strong investor confidence in SBI’s credit profile and long-term financial stability.
Broad-Based Institutional Participation
The bond issue attracted participation from a wide range of qualified institutional investors, including:
- Mutual funds
- Pension funds
- Provident funds
- Banks
- Other institutional investors
The diversified investor base demonstrates continued confidence in SBI’s financial performance and its ability to generate sustainable long-term value.
Management Commentary
Commenting on the successful fundraising, SBI Chairman C. S. Setty said that the strong response from investors and the broad participation across institutional categories reflect the market’s trust in the bank’s financial strength, governance standards, and long-term growth prospects.
He noted that the successful issuance reinforces SBI’s position as one of India’s most trusted financial institutions.
Strengthening SBI’s Capital Base
The AT1 bond issuance will strengthen SBI’s long-term regulatory capital without diluting shareholder equity.
By raising Additional Tier 1 capital, the bank will be able to:
- Strengthen its overall capital adequacy.
- Support future credit growth across retail, corporate, and infrastructure lending.
- Maintain comfortable regulatory capital buffers under Basel III norms.
- Enhance balance sheet resilience while supporting India’s expanding financing requirements.
The capital infusion provides SBI with additional financial flexibility to pursue business growth while complying with evolving regulatory requirements.