SBI Raises Rs.7,500 Crore Through Tier 2 Bond Issuance at 6.93% Coupon Rate

The State Bank of India (SBI) has raised ₹7,500 crore at a coupon rate of 6.93% through its Basel III-compliant Tier 2 bond issuance for the current financial year. The bonds have a tenor of 10 years with a call option after five years and on each anniversary date thereafter.

The State Bank of India (SBI) has raised funds to strengthen its financial position and support future lending. Instead of taking a loan, it decided to raise funds by issuing bonds — specifically, Tier 2 bonds that comply with Basel III regulations (rules made to ensure banks remain strong and stable).

Tier 2 bonds are a type of long-term debt issued by banks to boost their capital reserves. They are part of a bank’s regulatory capital, meaning they count toward the amount of money a bank must keep to protect depositors and the financial system in case of losses.

According to SBI, the issue received an overwhelming response from investors, with bids amounting to three times the base issue size of ₹5,000 crore. A total of 101 bids were received, reflecting participation from a diverse set of qualified institutional investors, including provident funds, pension funds, mutual funds, and banks.

SBI Chairman C. S. Setty said that the wide participation and diversity of bids demonstrated the strong trust and confidence investors have in the bank.

“Based on the response, the bank has decided to accept ₹7,500 crore at a coupon rate of 6.93%, payable annually for a tenor of 10 years with a call option after five years and on each anniversary thereafter,” SBI said.