The bonds are issued for a tenure of 10 years, with a call option after 5 years and on each subsequent anniversary. They are rated AAA with a stable outlook by ICRA Limited and CARE Ratings Limited, according to the SBI press release.
The issue received a strong response from investors, with bids roughly three times the base issue size of ₹5,000 crores. A total of 101 bids were submitted, showing participation from a wide range of qualified institutional bidders. These included provident funds, pension funds, mutual funds, banks, and other financial institutions.
C S Setty, Chairman of SBI, said that the broader participation and diversity of bids showed the trust investors have in the country’s largest bank. “Based on the response, the bank has decided to accept ₹ 7,500 crores at a coupon rate of 6.93% payable annually for a 10-year tenure, with a call option after 5 years and on each anniversary.
Earlier this year, the Bank also raised ₹25,000 crores in equity through QIP, which was oversubscribed by more than 4.5 times. An MTN of USD 500 million at a very favourable rate was also issued for a five-year tenure during the financial year.
The book saw high demand and was oversubscribed 4.5 times, indicating strong investor confidence in SBI’s strategy and the prospects for India’s banking industry.
Foreign investors made up 64.3% of total demand, highlighting India’s appeal as a growth destination. Major long-term investors received 88% of the final allocation, including 24% of the issue size allocated to foreign long-term investors.
Setty stated that this significant equity raise is a testament to SBI’s strong fundamentals, cautious risk management, and its digital-first growth strategy.
We appreciate the support from both domestic and international investors, as it highlights the current strength and future potential of the Indian economy, adds Shetty.