SBI raises ₹4,000cr via At1 bonds

The country’s biggest lender State Bank of India (SBI) has brought ₹4,000 crore up in capital through the Basel compliant Additional Tier 1 (AT1) bonds. The coupon for AT-1 bonds was fixed at 7.72 percent.

This was SBI’s first AT1 Bond issuance in the domestic market after the new Sebi guidelines kicked in. The issue collected an overwhelming response from investors, with bids in excess of ₹10,000 crore got against a base issue size of ₹1,000 crore, SBI said in a statement.

Based on the response, the Bank chose to acknowledge ₹4,000 crore at a coupon of 7.72%. This is the lowest pricing at any point presented on such debt, given by any Indian bank since the implementation of Basel III capital principles in 2013.

The new capital raise would assist with reinforcing capital adequacy ratio (CAR) and supplant AT1 bonds which are developing over period in current financial year. It stock shut 0.9 percent higher at 429.7 per share on BSE.

Its Capital Adequacy proportion (CAR) remained at 13.66 percent with level I of 11.32 percent at end June 2021. The Common Equity tier I (CET1) was 9.91 percent and AT-1 was 1.41 percent in June.

The AT1 instrument is perpetual in nature, however, it can be called back to by the issuer after five years or any anniversary date thereafter.