SBI's Successful Rs 5,000 Crore Basel III Bond Issuance

State Bank of India has successfully issued Rs 5,000 crore worth of its first Basel III-compliant Additional Tier 1 bonds. The issuance, offering a 7.98% coupon rate, saw an overwhelming investor response, exceeding the base issue size by 3.5 times with participation from a diverse range of institutional investors.

The State Bank of India (SBI) has successfully raised Rs 5,000 crore through its inaugural Basel III-compliant Additional Tier 1 bond issuance for this financial year. This marks a significant achievement for the nation's largest bank.

The bonds come with a 7.98% coupon rate and are perpetual, with a call option available after ten years and on each anniversary thereafter. The issuance drew a strong response from investors, with bids exceeding the base issue size by 3.5 times, surpassing Rs 2,000 crore.

The bank reported receiving 108 bids, demonstrating substantial interest from a diverse array of investors including provident funds, pension funds, insurance companies, mutual funds, NBFCs, and banks. Chairperson C S Setty emphasized that the wide participation illustrates the trust and confidence investors have in SBI. This successful issuance helps diversify and raise long-term non-equity regulatory capital for the bank, marking a significant step in its strategic capital management. Basel III represents global regulatory standards aimed at fortifying banks through better regulation, supervision, and risk management.