State Bank of India (SBI) has raised Rs 4,544 crore through additional Tier-1 (AT1) bonds. The funds will be used to support its business growth.
In a regulatory filing to the stock exchanges, the country’s largest lender said that it has successfully raised Rs 4,544 crore through “non-convertible, taxable, perpetual, subordinated, unsecured, fully-paid Up Basel III compliant AT1 bonds at a coupon of 8.20 per cent’’.
Since the bonds are perpetual, there is no maturity date.
The bonds will be listed on the BSE and the NSE. The latest fundraiser’s part of its December 2022 announcement where the lender’s board approved a proposal to mobilise Rs 10,000 crore capital through Tier I bonds.
SBI had then said that the mobilisation is subject to the government of India’s concurrence and that the capital raised through such bonds will last till 2023-24.
While AT1 bonds are a perpetual debt instrument used by banks to augment their core capital, issuers can redeem them through a call option after a specified period.
With credit showing strong double-digital growth in the past few months, banks have been raising funds through debt instruments or by hiking their deposit rates.
Last week, HDFC, the country’s largest mortgage lender, announced that it has raised a record Rs 25,000 crore through a private placement of bonds.