State Bank of India to raise USD 3 billion through debt in FY2025, shares rise

India’s largest lender State Bank of India (SBI), announced on June 11 that its board has approved a plan to raise up to $3 billion through debt in the current financial year, as per an exchange filing.

The state-owned financial institution plans to secure the funds in multiple tranches via either a public offering or private placement of senior unsecured notes. These notes will be denominated in US dollars or other major foreign currencies, according to the bank’s statement.

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State Bank of India share price was trading up 0.37 per cent at ₹835.20 at 2:40 pm on BSE.

“In this regard, pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we submit that the Executive Committee of the Central Board at its meeting held today, i.e., 11th June 2024, has approved, inter alia, to examine the status and decide on long-term fund raising in single/multiple tranches of up to US$ 3 Billion (US$ Three Billion) under RegS/144A, through a public offer and/or private placement of senior unsecured notes in US Dollar or any other major foreign currency during FY 2024-25,” the SBI said in an exchange filing.

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However, the Mumbai-headquartered bank did not disclose the intended use of the raised capital.

This move comes as Indian banks, including SBI, are strengthening their capital reserves to cater to increasing loan demands. Several other state-run banks including Canara Bank, Punjab and Sind Bank, and Punjab National Bank also have plans to raise funds through debt this fiscal year.

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In January, SBI successfully raised 50 billion rupees (approximately $600 million) by issuing Basel III-compliant additional tier-I perpetual bonds.

Additionally, SBI Chairman Dinesh Kumar Khara mentioned last month that the bank is open to raising equity capital to support its growth objectives, as per various media reports.