State Bank of India board approves raising of $2 billion from bonds in FY24

The board of the country's biggest lender State Bank of India (SBI) on Tuesday approved fund raise of up to $2 billion (about Rs 16,000 crore) for FY24 through bonds.

SBI will raise $2 billion through foreign currency bonds in 2023-24 in single or multiple tranches, the lender said in a stock exchange filing.

The executive committee of the Central Board in its meeting on 18 April 2023 has approved, inter alia, the following: “To examine the status and decide on long term fund raising in single / multiple tranches up to $2 billion under Reg-S/144A, through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2023-24.”

Last month, SBI has raised Rs 3,717 crore through additional tier 1 bond sale. The bank said this is the third Basel III compliant additional tier 1 (AT1) bond sale and the latest issue was closed at a coupon rate of 8.25 per cent. The proceeds will be used to augment its additional tier 1 capital and overall capital base of the bank and also for strengthening capital adequacy in accordance with RBI guidelines.

These perpetual bonds have a call option after 10 years and every anniversary thereafter.