The State Bank of India, the largest lender in the country, announced on June 11 that its board has approved raising up to $3 billion through debt in the current financial year. The bank plans to raise these funds in one or more tranches either through a public offer or a private placement of senior unsecured notes. These notes will be denominated in US dollars or another major foreign currency.
According to a stock exchange filing made by SBI, the Executive Committee of the Central Board approved the examination and decision-making process for long-term fund raising. This includes the possibility of raising up to $3 billion through a public offer and/or private placement of senior unsecured notes in US dollars or any other major foreign currency during the fiscal year 2024-25. However, the bank did not specify how the proceeds from this fund raising will be utilized.
Indian banks are taking steps to strengthen their capital base in order to meet the increasing demand for loans. Other public sector banks, such as Canara Bank, Punjab and Sind Bank, and Punjab National Bank, also have plans to raise funds through debt in this fiscal year.
In January, SBI successfully raised Rs 5,000 crore by selling Basel III-compliant additional tier-I perpetual bonds. Additionally, the bank’s Chairman, Dinesh Kumar Khara, stated last month that SBI is open to raising equity capital in order to support its growth.
On Tuesday, SBI’s shares rose by 0.8 percent, and the stock has gained 30.5 percent year-to-date.