SBI expected to raise up to ₹7,500 Crore through Tier-2 Bonds

State Bank of India (SBI) is set to raise up to ₹7,500 crore through a tier-2 bond sale, scheduled for next week, as it seeks to address increasing credit demand. The bond issuance will have a base size of ₹3,500-4,000 crore, with the possibility of raising additional funds through a greenshoe option.

The bond issuance will have a base size of ₹3,500-4,000 crore, with the possibility of raising additional funds through a greenshoe option. Bidding for these bonds is expected to occur on September 18, with payment due on September 19. This move follows a previous successful bond issuance on August 28, where SBI raised ₹7,500 crore via 15-year tier-2 bonds at a coupon rate of 7.42%.

For the upcoming sale, the bank is likely to offer a coupon rate around 7.40%, reflecting its reputation for offering lower coupons compared to other banks, attributed to its strong government backing and status as the largest bank in India.

Sources indicate that this bond sale may be the last tier-2 issuance for SBI in the current financial year, as the bank has already received approval to raise a total of ₹25,000 crore through tier-1 and tier-2 bonds. After this issuance, SBI will have room for approximately ₹10,000 crore in additional tier-1 bonds.

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