New Delhi: State Bank of India (SBI), the largest lender in the country, is likely to kick off rupee bond issuances for the financial year 2023-2024 from June-end or early next month with a sale of additional tier-1 bonds, the report said.
The sources said that with a base size of ₹3000 crore and a green shoe option of ₹7,000 crore, the bond sale could be for up to ₹10,000 crore. The bonds may have a call option after 10 years, and the issue date could be June 29.
Last week, SBI’s board approved raising funds worth ₹50,000 crores through bond sales in the current financial year.
SBI issued a successful dollar bond issuance in April; thus, it is doubtful that it will opt to issue an overseas bond at the moment as aggressive rate hikes by global central banks have stoked volatility in international bond markets.
“Something should be coming by July; it generally takes around 3-4 weeks to get the government approval. Given the way the forwards are behaving, dollar-denominated bonds don’t make as much sense as INR bonds right now for SBI. They are considering all three options within tier-1, tier 2, and infrastructure bonds,” a source said.
Late April, SBI had successfully tapped global bond markets and concluded the issuance of $750 million worth of securities with a maturity of 5 years at a coupon of 4.875%, payable semi-annually. The spread between US bonds of relevant maturity and SBI’s bonds was considered aggressive, indicating firm demand for the state-owned bank’s debt offering, treasury executives had said.
In the previous financial year, SBI commenced sales of AT-1 bonds in September.
On Monday, HDFC concluded a large debt sale, raising funds worth ₹13,187 crores through 10-year bonds. Axis Bank and ICICI Bank served as the issue’s arrangers, and the coupon rate for HDFC’s bonds was set at 7.75%, HDFC said in an exchange filing. The benchmark 10-year government bond’s yield finished on Monday at 7.02%. Government bond yields are the benchmarks used to determine the pricing of corporate debt.
Meanwhile, National Bank for Agricultural and Rural Development (NABARD) is likely to tap debt capital markets this week to raise to ₹5,000 crores.
