SBI board approves fundraising of ₹50,000 cr in FY24

State-owned lender State Bank of India (SBI) today said its central board has approved fundraising of ₹50,000 crores through private placement during FY24. The funds will be raised by the issue of debt instruments, including but not limited to long-term bonds, Basel III-compliant additional tier 1 bonds, Basel-III compliant tier 2 bonds.

"The central board of the bank has, inter alia accorded approval for raising funds in INR and/or any other convertible currency by issue of debt instruments including but not limited to Long Term Bonds, Basel III compliant Additional Tier 1 Bonds, Basel III compliant Tier 2 Bonds, upto an amount of ₹50,000 crores (Rupees Fifty Thousand Crores only) through private placement mode to Indian and/or Overseas investors during FY24, subject to GOI approval wherever required," SBI says in an exchange filing.

In line with the broader market, shares of SBI, meanwhile, saw a decline of 1.56% to ₹579.30 on the Bombay Stock Exchange (BSE). The scrip opened a gap down at ₹588 and surged to an intra-day high of ₹589. At the current share price, SBI's market cap stands at ₹5.16 lakh crore.

The latest fundraising plans by SBI come more than a month after it approved $2 billion fundraising via offshore bonds during FY 2023-24. A month before that, the Dinesh Khara-led bank raised ₹3,717 crore through Tier 1 bond at a coupon rate of 8.25%, making it SBI's third Tier 1 bond issuance for 2022-23. The issue received bids worth ₹4,537 crore, and was oversubscribed by about 2.27 times against ₹2,000 crore base.

In February 2023, the bank had raised additional tier 1 bonds of ₹4,544 crore at a spread of 71 bps over the corresponding FBIL G-Sec par curve on the date of bidding. It had also raised ₹10,000 crore through its maiden infrastructure bond issuance in December 2022, which was touted to be the largest single infrastructure bond issued by any bank in the country.

Brokerages have set an average target price of 716.09 for the State Bank of India. The consensus estimate represents an upside of 23.72% from the current share price, shows data by the stock market data analysis platform Trendlyne.

India's biggest public sector lender saw an 83.18% jump in profit at ₹16,695 crore in the January-March quarter of 2022-23 vs ₹9,114 crore in the year-ago period. For the full fiscal year, SBI's profit was ₹50,232 crore, thus recording 58.58% YoY growth. SBI's net interest income (NII) for Q4 FY23 increased 29.47% YoY to ₹40,393 crore while it grew 19.99% to ₹1,44,841 crore for the entire year. In FY23, SBI's market capitalisation surged to ₹5,23,250 crore from ₹4,40,474 crore in FY22.