Did the Board of SBI Approve a Rs 20,000 Crore Fundraising?
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Synopsis
SBI's board has officially approved a substantial fundraising initiative of Rs 20,000 crore through bond issuance. This strategic move aims to strengthen the bank's capital base and enhance its financial stability while bolstering investor confidence.
Key Takeaways
- SBI plans to raise Rs 20,000 crore through bonds this fiscal year.
- The move aims to strengthen the bank's capital base.
- SBI's stock rose over 2 percent following the announcement.
- Previous approval for raising Rs 25,000 crore in equity capital during FY26.
- SBI's agricultural lending exceeded Rs 3.5 lakh crore in FY25.
New Delhi, July 16 (NationPress) The State Bank of India's board of directors has recently given the green light for a significant fundraising initiative, aiming to gather Rs 20,000 crore through bond issuance targeted at domestic investors within the current financial year (FY26).
In a regulatory announcement, India’s foremost bank confirmed that its Central Board sanctioned the raising of up to Rs 20,000 crore this financial year via Basel III-compliant Additional Tier 1 and Tier 2 bonds. These bonds will be denominated in Indian rupees and are intended for domestic investors, contingent upon the necessary government approvals.
This strategic move is designed to enhance the capital foundation of the nation’s largest bank.
Following this fundraising news, SBI's stock surged over 2 percent, reaching an intra-day peak of Rs 834 on the National Stock Exchange (NSE).
Earlier in May, SBI’s board also authorized a plan to raise equity capital of up to Rs 25,000 crore during FY26. This capital will be procured through various means, including Qualified Institutional Placement (QIP), Follow-On Public Offer (FPO), or alternative methods.
The goal is to strengthen SBI’s Common Equity Tier 1 (CET1) capital ratio, thereby enhancing the bank’s financial stability.
The anticipated QIP will lead to a dilution of the government’s stake, which was at 57.43 percent as of March 31, 2025. To facilitate the QIP process, SBI has engaged six leading investment banks: ICICI Securities, Kotak Investment Banking, Morgan Stanley, SBI Capital Markets, Citigroup, and HSBC Holdings Plc.
SBI also provided a dividend payout of Rs 8,076.84 crore to the government for the financial year 2024-25, with the bank's net profit soaring to Rs 70,901 crore.
Celebrating its 70th anniversary, SBI boasts a remarkable balance sheet of ₹66 lakh crore and a customer base exceeding 52 crore.
Moreover, SBI plays a pivotal role in financial inclusion, managing over 151 million Jan Dhan accounts and maintaining an extensive correspondent network. Its agricultural lending surpassed Rs 3.5 lakh crore in FY25, the highest in the nation, thereby supporting agricultural infrastructure.
In FY25, SBI further solidified its social impact by investing Rs 610.8 crore in Corporate Social Responsibility (CSR) initiatives, reaching out to 94 'Aspirational Districts', focusing on healthcare, education, rural development, and environmental sustainability.
Point of View
It is crucial to recognize SBI's proactive approach to strengthening its capital base. The approval for raising Rs 20,000 crore through bonds not only reflects the bank's commitment to enhancing its financial health but also signifies a positive outlook for India's banking sector amidst evolving economic challenges.
NationPress
16/07/2025
Frequently Asked Questions
What is the purpose of SBI raising Rs 20,000 crore?
SBI aims to strengthen its capital base by raising Rs 20,000 crore through bond issuance, which will enhance its financial stability.
Who will purchase the bonds issued by SBI?
The bonds will be issued to domestic investors in Indian rupees.
How will this fundraising affect SBI's stock?
The fundraising initiative has already led to a surge in SBI's stock price, indicating positive investor sentiment.
What types of bonds will SBI issue?
SBI will issue Basel III-compliant Additional Tier 1 and Tier 2 bonds.
What was the government's stake in SBI as of March 2025?
The government's stake in SBI was recorded at 57.43 percent as of March 31, 2025.
