The country’s largest lender, State Bank of India (SBI), has raised Rs 4,691 crore through the issuance of Basel III-compliant Additional Tier-1 (AT1) bonds. This is SBI’s first such fundraising exercise in the current financial year. The bonds were issued to domestic institutional investors at an annual coupon rate of 7.75%. They come with a five-year call option, which will allow SBI to redeem the bonds after five years, and would be subject to regulatory approvals after every anniversary thereafter.
The announcement propelled massive response from investors, attracting bids worth more than twice the base issue size of Rs 3000 crore. The bank revealed that it had received 89 bids from a diverse pool of qualified institutional investors, including provident funds, pension funds, mutual funds and banks.
Given the strong demand, SBI decided to accept bids worth Rs 4,691 crore, which was significantly higher than the initial base issue size.
Commenting on the fundraising, SBI Chairman C S Setty said the enthusiastic response reflected investors’ confidence in the bank.
“This issue attracted a robust response from investors with bids of more than 2 times against the base issue size of Rs 3,000 crores. The total number of bids received was 89, indicating participation from diverse set of qualified institutional bidders. The investors were across provident funds, pension funds, mutual funds, banks etc.”
The fundraising will likely strengthen SBI’s capital base and support its future lending and business growth plans.
