SBI To Raise Rs 10,000 Crore Via Infrastructure Bonds

State Bank of India, The country’s largest lender, said on Thursday it would consider raising funds by issuing up to Rs 10,000 crore ($1.2 billion) of infrastructure bonds.

The executive committee of the central board of the bank will meet on 29 November 2022 to consider the fundraising, which will also include a green shoe option of 50 billion rupees, the bank said in a stock exchange filing.

If approved, the fundraising would be through a public issue or private placement during fiscal 2023, the bank added.

Analysts said in September that Indian banks might continue their fundraising spree over the next few months by issuing securities including infrastructure bonds as they rush to meet rising credit demand and lock in funds at cheaper rates.

SBI’s Chairman Dinesh Kumar Khara yesterday said that the lender is expected to maintain its asset quality even though loan growth is higher.

“Pursuant to Regulation 29 (1) (d) and other applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 we inform that a meeting of the Executive Committee of the Central Board of State Bank of India is scheduled to be held on Tuesday, 29 November 2022 to consider inter alia, the following: To seek approval for raising of Infrastructure Bonds up to an amount of Rs 10,000 crores (including a green shoe option of Rs 5,000 crores) through a public issue or private placement, during FY23,” the bank had informed in a regulatory filing on 24 November.

In the July-September quarter, SBI’s gross non-performing assets eased to 3.52 percent from 3.91 percent in Q1FY23 and 4.9 percent in Q2FY22. Similarly, net NPAs dropped to 0.8 percent in September 2022 quarter from 1 percent in June 2022 quarter and 1.52 percent in September 2021 quarter.

The shares of State Bank of India were trading below at 0.06% to Rs 608.35 apiece at the BSE at 11 am on 29 November 2022.

SBI Chairman Dinesh Khara said that although bank credit had been growing twice as fast as deposits, SBI has a large base of deposits. “We have Rs 3.5 lakh crore, which was invested in liquid instruments when there was not enough opportunity to lend. We can now use this for funding credit growth,” the chairman said.

The bank also recorded credit growth at 19.93 percent year-on-year in July-September.

Indian banks’ credit growth was 17% year-on-year in the 14 days ended 4 November 2022, according to data from the Reserve Bank of India.