SBI aims to raise up to Rs 10,000 crore via bond sale
State Bank of India is likely to raise up to Rs 10,000 crore through the issuance of a tier-2 bond next week as the country’s largest bank looks to shore up long-term capital amid firm demand for credit.
“They (SBI) are aiming to garner up to Rs 10,000 crore through a tier-2 bond sale. The bonds are rated AAA by Crisil and India Ratings and will likely have a maturity of 15 years and a call option of 10 years,” a source aware of the development said.
Typically, the coupon rates – or interest paid to investors – for SBI’s bonds are the lowest in the banking sector, as the lender witnesses firm demand for its debt offerings, given its government ownership and status as the country’s largest bank.
While detailing its June quarter results, SBI’s top management forecast credit growth of more than 15% in the current financial year, saying demand in retail loans would be complemented by a healthy corporate loan pipeline in excess of Rs 3.5 trillion.
Corporate loan pipeline exceeded an estimate of Rs 3.3 trillion in March, with the bank saying that sectors such as manufacturing, renewable energy, ports, and airports were generating demand.
SBI has raised a total of Rs 20,000 crore through the sale of two sets of 15-year infrastructure bonds so far in the current financial year. Prior to the infrastructure bond sales, which were carried out in late July and September, respectively, SBI had raised Rs 3101 crore through the sale of additional tier-1 bonds in early July.
Over the past few months, several banks, including Kotak Mahindra Bank, ICICI Bank and Canara Bank have also opted for the infrastructure bond route to raise funds.
