SBI Raises ₹4,691 Cr via AT1 Bonds
By Business Desk
State Bank of India successfully raised ₹4,691 crore through its Basel III-compliant AT1 bond issuance, attracting strong institutional investor demand at a 7.75% coupon rate.
State Bank of India (SBI) has successfully raised ₹4,691 crore through its first Basel III-compliant Additional Tier 1 (AT1) bond issuance of the current financial year. This significant offering garnered robust demand from institutional investors, with subscriptions exceeding twice the initially planned amount.
The perpetual AT1 bonds were issued at a coupon rate of 7.75%. These bonds feature a call option, allowing SBI to redeem them after five years and on every anniversary thereafter. They have secured an AA+ rating with a stable outlook from both CRISIL Ratings and CARE Ratings.
The Role of Additional Tier 1 Bonds
Additional Tier 1 bonds are vital instruments for banks to comply with the stringent Basel III capital adequacy requirements. These perpetual instruments are structured with specific loss-absorption capabilities.
During periods of severe financial stress, AT1 bonds can be either written down or converted into equity, a process that requires approval from the Reserve Bank of India. This unique feature ensures that banks maintain sufficient capital buffers.
For SBI, this issuance is pivotal in diversifying its funding sources and strengthening its long-term non-equity regulatory capital base. SBI Chairman C S Setty highlighted that the broad participation from institutional investors underscores confidence in India’s largest bank.
Institutional investors, including provident funds, pension funds, and mutual funds, showed keen interest in the offering. Their strong demand signals a positive outlook on SBI’s financial health and strategic direction.
Following the news, SBI’s stock closed 0.10% higher at ₹1,013.80 per share on the BSE. The bank is slated to announce its financial results for the first quarter of fiscal year 2027 on August 7, 2026.