India’s largest lender, State Bank of India (SBI), announced on June 11 its board’s approval of a plan to raise up to $3 billion through debt in the current financial year, according to an exchange filing.
The state-owned financial institution aims to secure the funds in multiple tranches through either a public offering or private placement of senior unsecured notes. These notes will be denominated in US dollars or other major foreign currencies, as stated by the bank.
The filing stated, “The Executive Committee of the Central Board at its meeting held today, i.e., 11th June 2024, has approved, inter alia, to examine the status and decide on long-term fund raising in single/multiple tranches of up to US$ 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.”
However, SBI did not disclose the specific purpose for the raised capital.
This decision aligns with the trend of Indian banks, including SBI, fortifying their capital reserves to meet the growing demand for loans. Other state-run banks like Canara Bank, Punjab and Sind Bank, and Punjab National Bank also have similar plans to raise funds through debt in the current fiscal year.
In January, SBI successfully raised ₹50 billion (approximately $600 million) by issuing Basel III-compliant additional tier-I perpetual bonds.
Furthermore, SBI Chairman Dinesh Kumar Khara mentioned last month that the bank is open to raising equity capital to support its growth objectives.
