New Delhi, July 30 -- State Bank of India (SBI), the country's largest lender, raised Rs.4,691 crore on Wednesday through its first additional tier-1 (AT-1) bond issue this financial year, the state-owned lender said in a press statement on Wednesday. The bonds have a call option of five years and a coupon rate of 7.75%. The bond issue, which had a base size of Rs.3,000 crore and a greenshoe option of Rs.2,000 crore, is rated AA+ by Crisil Ratings and Care Ratings.
"This issue attracted a robust response from investors, with bids of more than two times the base issue size of Rs.3,000 crore. The total number of bids received was 89, indicating participation from a diverse set of qualified institutional bidders," SBI said, noting that participants included provident funds, pension funds, mutual funds, and banks. The issuance is significant as the bank has been able to diversify and raise long term non-equity regulatory capital, chairman CS Setty said in the press statement.
On 18 June, the bank had approved a plan to raise up to Rs.60,000 crore during FY27 by issuing various debt instruments, including AT1 bonds and tier-II bonds. In FY26, SBI raised Rs.18,500 crore through domestic bond issuances.
The move comes as banks continue to tap debt markets to meet regulatory capital requirements, fund credit growth, and diversify funding sources. AT1 and tier-2 bonds form part of banks' regulatory capital under Basel III norms, while long-term bonds are often used to support lending and asset-liability management.
SBI has been among the most active issuers in the domestic bond market, regularly raising funds through infrastructure bonds and capital instruments to support balance-sheet expansion amid strong credit demand. As of 31 March, SBI's capital-to-risk weighted assets ratio stood at 15.40%, with its common equity tier-I (CET-1) ratio at 12.29% and overall tier-I ratio at 13.33%.
The move also follows SBI's decision, announced on 12 May, to raise up to $2 billion through overseas bond issuances in FY27 as part of efforts to diversify its funding base and broaden access to global investors. The bank last tapped overseas bond markets in September 2025, raising $500 million through a five-year dollar-denominated issue at a record-low coupon of 4.5%.
For the March quarter, the state-owned lender reported a 17% year-on-year increase in gross advances to Rs.49.32 trillion, and an 11% rise in deposits to Rs.59.75 trillion. Despite this weaker-than-expected performance and concerns around the West Asia conflict, SBI retained its FY27 credit-growth guidance of 13-15% on 8 May.
Speaking to reporters after the earnings announcement in May, Setty said banking system credit growth is expected at 13-14% in the current fiscal year, while deposit growth is likely to be 11-12%. He said asset quality across the banking sector remains "very well", though the full impact of the conflict has yet to emerge, given potential second-order effects. He cautioned that a prolonged conflict, lasting five to six months, could affect the economy through higher fuel costs and supply-chain disruptions.
SBI is set to announce its June-quarter earnings results on 7 August. Published by HT Digital Content Services with permission from MINT. For any query with respect to this article or any other content requirement, please contact Editor at [email protected]