SBI to raise Rs 7,500 crore through Basel-III Tier-II bonds

State Bank of India

State Bank of India (SBI), the country’s largest state-owned lender, pans  to raise up to Rs 7,500 crore through Basel-III compliant Tier-II bonds maturing in 10 years, sources told Moneycontrol, as it returns to the rupee debt market after a year.

The bond issue will have a base size of Rs 5,000 crore, with an option to retain oversubscription, or greenshoe option, of up to Rs 2,500 crore.

The greenshoe option is a provision in an underwriting agreement that grants the underwriter the right to sell investors more bonds than initially planned if the demand is higher than expected.

Bidding is expected either this or next week. “So far, the bank has not uploaded the documents to issue bonds on Electronic Bidding Platform (EBP), it may happen by today end of the day, after which bidding will take place later this week,” a market source said on October 15.

If the documents are uploaded during the day, the bidding will take place the next day but if done on October 16, then it moves to October 20.

The bond have a call option after five years and every year thereafter. A "call option in bonds" refers to the issuer's right to redeem or repurchase a bond from the bondholder before its maturity date.

On July 16, the bank’s board approved raising up to Rs 20,000 crore through bonds in FY26.

"The Central Board of the Bank in its meeting held today i.e. 16.07.2025 accorded approval for raising funds in INR by issue of Basel III compliant Additional Tier 1 and Tier 2 Bonds, up to an amount of Rs 20,000 crore to domestic investors during FY26, subject to GOI approval wherever required," the PSU lender said an exchange filing.

On September 9, SBI announced the listing of its $500 million of “Regulation S” bonds issued at a coupon rate of 4.5 percent at NSE-IX in Gift City. The bond, priced at a spread of 75 bps over the benchmark, is listed on SGX-ST and NSE-IX. It carries rating of BBB and BBB- from S&P and Fitch, respectively.