SBI likely to raise Rs 5,000 crore through Tier-II bonds by August, says report

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26 Aug, 2025 12:21

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India's largest lender State Bank of India (SBI) is likely to raise funds worth nearly Rs 5,000 crore through debt instruments over the next two months, news agency Reuters reported on June 27 citing people familiar with the matter, helping the shares sustain early gains of nearly a percent on a day the Bank Nifty extended its rally to record highs.

The PSU lender is planning to raise funds through the issuance of Basel III-compliant tier II bonds with a 10-year or 15-year maturity, in July or August, the report said citing sources, with initial talks having begun and the duration of the bond issuance would be finalized considering the rate at the time of issuance, the report added.

One source told the news agency that the 15-year bond structure could be explored with a call option at the end of 10 years.

Moneycontrol couldn't independently verify the report.

Earlier in May, SBI had approved the proposal to raise up to $3 billion as long-term fund in single or multiple tranches during the ongoing FY26 through a public offer, or a private placement of senior unsecured notes in US Dollar or any other major foreign currency.

SBI Chairman CS Setty had said during the fourth quarter earnings call that the uncertainty over tariffs will impact the economy and the investment scenario. "Without raising capital, the bank's growth will not be impacted. Benign asset quality is likely to continue for more period," SBI Chairman CS Setty had said.

The public lender had earlier raised Rs 7,500 in September last year through 15-year tier II bonds, which had a call option at the end of 10 years. In the previous financial year (FY25), the bank had raised 150 billion rupees through tier II bonds.

Also Read: Nifty Bank hits new all-time high again, tops 57,400 for the first time ever

On June 25, Bloomberg News had reported citing people familiar with the development that State Bank of India had selected investment bankers including Citigroup and HSBC to manage the share sale. SBI has also chosen ICICI Securities, Kotak Capital, Morgan Stanley and SBI Capital for the fundraise, the report added.