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Updated: July 10, 2025 20:07
Boardroom Watch India's biggest asset financer, State Bank of India, informed that it will convene a board meeting on July 16, 2025, to approve a proposal to raise funds by issuing Basel III-compliant rupee-denominated capital bonds. It is a part of SBI's overall strategy to maintain robust capital adequacy and finance credit growth in FY26.
Key Highlights
The suggested issue is to comprise Basel III-compliant Tier I and Tier II bonds
The bonds may be issued in one tranche or in multiple tranches depending on market conditions and regulatory permissions
The fundraising will be conducted in INR, targeting domestic institutional investors
Strategic Reasoning
SBI aims to enhance its capital buffers as per RBI's regulatory requirements
These funds will be utilized to finance loan growth, i.e., in SME, retail, and infrastructure segments
Basel III bonds offer capital structure flexibility without diluting shareholders' equity
Market Context
SBI had already mobilized Rs 5,000 crore earlier through Tier II bonds in FY25 and has board approval to mobilize another Rs 25,000 crore.
The size of bond yields and liquidity will determine the issue price and timing
The bank's strong investor base and sovereign backing is set to ensure healthy subscription
Investor Viewpoint
Analysts interpret the move as forward-looking and aligned to SBI's growth path
The outcome of the 16 July sitting will be watched closely for indications on bond structure and quantum
Sources: Reuters, Economic Times, Moneycontrol, Rediff MoneyWiz, Yahoo Finance India
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