State Bank of India sets floor price at INR 811.05 for its INR 20,000 crore bonds

NEW DELHI — State Bank of India (SBI), the country's largest public sector lender, on Wednesday set the floor price at INR 811.05 per equity share for its INR 20,000 crore bonds.

The board director of the bank approved the proposal to raise the amount through issuing bonds to domestic investors.

The issue's subscription period began on Wednesday after the bank's board of directors approved the fundraising during a meeting on Wednesday, the public sector lender informed exchanges.

The floor price is 2.3 per cent less than the closing price of SBI shares on the BSE on Wednesday. The scrip settled at INR 831.55, up 1.81 per cent from the previous close.

Also read: Gold and silver prices decline for 2nd consecutive day

The biggest lender in India confirmed in a separate regulatory filing that the Central Board authorised the issuance of ‘Basel III-compliant Additional Tier 1 and Tier 2 bonds’ with a maximum value of INR 20,000 crore for the current fiscal.

Subject to any required government approvals, these bonds will be issued to domestic investors in Indian rupees. The goal of the action is to increase the nation's biggest bank's capital base.

The SBI board approved raising to INR 25,000 crore in equity capital for FY26 earlier this year in May.

Qualified Institutional Placement (QIP), Follow-On Public Offer (FPO), or other approved means will be used to raise the capital in one or more tranches.

In order to strengthen the bank's financial standing, the goal is to increase SBI's Common Equity Tier 1 (CET1) capital ratio.

The government's stake, which was 57.43 per cent as of March 31, will be diluted as a result of the proposed QIP.

Six well-known investment banks have been chosen by SBI to oversee the QIP process: ICICI Securities Ltd, Kotak Investment Banking, Morgan Stanley, SBI Capital Markets Ltd, Citigroup, and HSBC Holdings Plc.

For the fiscal year 2024-2025, SBI previously sent the government a dividend cheque of INR 8,076.84 crore.

For the fiscal year 2024-2025, the public sector bank's net profit soared to INR 70,901 crore.

The bank is commemorating its 70th year of existence with a balance sheet that has increased to INR 66 lakh crore and a customer base that has surpassed an incredible 52 crore.