The State Bank of India (SBI) has successfully concluded a significant fundraising effort, securing ₹7,500 crore through its latest Basel III compliant Tier 2 bond issuance. These bonds come with an appealing annual coupon rate of 6.93% for the current financial year.
Designed with long-term investors in mind, these bonds feature a 10-year maturity period. Notably, they include a ‘call option,’ allowing the bank to repurchase them after five years, and on every anniversary date subsequent to that, providing flexibility for both the issuer and investors.
The bond offering was met with exceptional enthusiasm from investors, garnering bids that were approximately three times the base issue size of ₹5,000 crore. A total of 101 bids were received, demonstrating widespread interest from a diverse range of qualified institutional buyers, including provident funds, pension funds, mutual funds, and various banks. This strong demand underscores investor confidence in SBI’s financial health.
C. S. Setty, Chairman of SBI, highlighted that the broad participation and varied nature of the bids clearly reflect the deep trust and confidence that investors place in the bank’s stability and future prospects.
Following this robust market response, SBI confirmed its decision to accept the full ₹7,500 crore at the previously announced annual coupon rate of 6.93%. The bonds maintain their 10-year tenor with the call option available after five years and on each subsequent anniversary, reinforcing the terms that attracted such strong investor interest.