SBI Raises Rs 5,000 Cr Through Basel III Compliant AT1 Bond Issuance

The State Bank of India (SBI), the country’s largest lender, successfully raised Rs 5,000 crores through its first Basel III compliant Additional Tier 1 (AT1) bond issuance for FY 2024-25 at a coupon rate of 7.98 per cent. The bond issue, which has a perpetual tenor with a call option after 10 years, received an overwhelming response from investors, with bids exceeding the base issue size by 3.5 times.

The issuance saw 108 bids from a diverse set of institutional investors, including provident and pension funds, insurance companies, mutual funds, NBFCs, and banks. SBI initially targeted a base size of Rs 2,000 crores but decided to accept Rs 5,000 crores due to strong investor interest.

Commenting on the success, SBI Chairman C S Setty said, "The wider participation and heterogeneity of bids demonstrate the trust investors place in the country’s largest bank." The bonds are rated AA+ with a stable outlook by CRISIL and CARE Ratings, further reflecting investor confidence in the bank’s financial strength and stability.

This bond issuance will help SBI diversify its funding sources and raise long-term non-equity regulatory capital, further strengthening its capital base in compliance with Basel III norms.