State Bank of India (SBI) raised ₹4,691 crore through its first Basel III-compliant Additional Tier 1 (AT1) bond issuance of the current financial year, driven by strong institutional demand, according to livemint.com. The bonds carry a 7.75% coupon rate and have a perpetual tenor, with an AA+ rating from CRISIL and CARE Ratings.
The issuance attracted subscriptions more than twice the initial planned amount, prompting SBI to accept bids above the base issue size. This strong demand from institutional investors underscores the confidence in SBI’s creditworthiness and the attractiveness of the bond’s terms, livemint.com reported. The bonds are the first Basel III-compliant AT1 bonds SBI has issued this financial year.
Basel III-compliant AT1 bonds are a key instrument for banks to bolster their capital base while meeting regulatory requirements. SBI’s successful issuance marks a significant move in the Indian banking sector’s capital-raising efforts, especially as the country’s largest lender. Comparable issuances by other major banks have also seen robust demand, reflecting investor appetite for high-quality debt instruments in the financial sector, per livemint.com.
The ₹4,691 crore raised through this issuance will support SBI’s capital adequacy and growth plans. The bonds’ AA+ rating from CRISIL and CARE Ratings confirms their credit quality. This issuance comes amid a broader trend of Indian banks tapping the bond market to strengthen their capital buffers under Basel III norms.