Latest news with #BaselIII-compliant
Mint
3 days ago
- Business
- Mint
SBI share price may be in focus today as the PSU bank launches ₹25k crore QIP; details here
State Bank of India (SBI) share price is likely to be in focus on Thursday, July 17, a day after the company announced the launch of a share sale to institutional investors to raise ₹ 25,000 crore. SBI share price ended 1.87 per cent higher at ₹ 831.70 apiece on Wednesday, extending gains to the fourth consecutive session. SBI's board on Wednesday, July 16, approved the launch of a qualified institutional placement (QIP) of fully paid-up equity shares of the company at a floor price of ₹ 811.05 per equity share, which is at a 2.3 per cent discount to the last closing price of ₹ 830.5 on the NSE. The issue opened on Wednesday, July 16. The bank may offer a maximum 5 per cent discount on the floor price calculated for the QIP. The bank will determine the issue price after consulting the book-running lead managers. SBI's central board on July 16 approved raising funds by the issue of Basel III-compliant additional tier-1 and tier-2 bonds, up to an amount of ₹ 20,000 crore to domestic investors during FY26. In May this year, SBI's board gave its nod to raise funds of about ₹ 25,000 crore in the current financial year (FY26) in one or more tranches through QIPs or a follow-on public offer (FPO) or any other permitted mode or a combination thereof. In recent times, the SBI share price has underperformed the market benchmark, gaining nearly 5 per cent this year so far compared to an over 6 per cent gain in the benchmark Nifty 50. Over the last year, the PSU bank stock has declined 7 per cent, hitting a 52-week low of ₹ 680 on 3 March this year. SBI share price hit a 52-week high of ₹ 899 on 19 July last year. However, on a monthly scale, the stock has been in the green since March. In July, it has climbed 1.4 per cent. Read all market-related news here
Mint
3 days ago
- Business
- Mint
SBI share price may be in focus today as the PSU bank launches ₹25k crore QIP; details here
State Bank of India (SBI) share price is likely to be in focus on Thursday, July 17, a day after the company announced the launch of a share sale to institutional investors to raise ₹ 25,000 crore. SBI share price ended 1.87 per cent higher at ₹ 831.70 apiece on Wednesday, extending gains to the fourth consecutive session. SBI's board on Wednesday, July 16, approved the launch of a qualified institutional placement (QIP) of fully paid-up equity shares of the company at a floor price of ₹ 811.05 per equity share, which is at a 2.3 per cent discount to the last closing price of ₹ 830.5 on the NSE. The issue opened on Wednesday, July 16. The bank may offer a maximum 5 per cent discount on the floor price calculated for the QIP. The bank will determine the issue price after consulting the book-running lead managers. SBI's central board on July 16 approved raising funds by the issue of Basel III-compliant additional tier-1 and tier-2 bonds, up to an amount of ₹ 20,000 crore to domestic investors during FY26. In May this year, SBI's board gave its nod to raise funds of about ₹ 25,000 crore in the current financial year (FY26) in one or more tranches through QIPs or a follow-on public offer (FPO) or any other permitted mode or a combination thereof. In recent times, the SBI share price has underperformed the market benchmark, gaining nearly 5 per cent this year so far compared to an over 6 per cent gain in the benchmark Nifty 50. Over the last year, the PSU bank stock has declined 7 per cent, hitting a 52-week low of ₹ 680 on 3 March this year. SBI share price hit a 52-week high of ₹ 899 on 19 July last year. However, on a monthly scale, the stock has been in the green since March. In July, it has climbed 1.4 per cent. Read all market-related news here Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
Hans India
3 days ago
- Business
- Hans India
SBI gets nod to raise Rs 20,000 cr via bonds
New Delhi: The board of directors of State Bank of India (SBI) on Wednesday approved a proposal to raise funds worth Rs20,000 crore through the issuance of bonds to domestic investors in the current financial year (FY26). In a regulatory filing, India's largest lender confirmed that its Central Board approved the raising of up to Rs20,000 crore during the current financial year through Basel III-compliant Additional Tier-1 and Tier-2 bonds. These bonds will be issued in Indian rupees to domestic investors, subject to government approvals where necessary. The move is aimed at strengthening the capital base of the country's largest the announcement of the fundraiser, SBI shares shot up over two per cent to touch an intra-day high of Rs834 on the National Stock Exchange (NSE). Earlier in May this year, SBI's board gave the go-ahead for raising equity capital of up to Rs25,000 crore during FY26. The capital will be raised in one or more tranches via Qualified Institutional Placement (QIP), Follow-On Public Offer (FPO), or other permissible methods. The objective is to boost SBI's Common Equity Tier 1 (CET1) capital ratio— which will bolster the bank's financial health. The proposed QIP will lead to a dilution of the government's stake, which stood at 57.43 per cent as of March 31, 2025. To manage the QIP process, SBI has appointed six prominent investment banks -- ICICI Securities Ltd, Kotak Investment Banking, Morgan Stanley, SBI Capital Markets Ltd, Citigroup, and HSBC Holdings Plc. SBI gave a dividend cheque of Rs8,076.84 crore to the government for the financial year 2024-25. The public sector bank's net profit for the financial year 2024-25 shot up to Rs 70,901 crore. The bank is celebrating its 70thyear of operations with a balance sheet that has soared to `66 lakh crore and the number of its customers surging past a staggering 52 crore. SBI also drives financial inclusion through more than 151 million Jan Dhan accounts and an extensive correspondent network. The bank's agricultural lending exceeded Rs3.5 lakh crore in FY25 -- the highest in the country -- supporting farm infrastructure, according to the statement. In FY25, the Bank reinforced its social impact footprint by investing Rs 610.8 crore in CSR initiatives, reaching 94 'Aspirational Districts'. Its efforts spanned healthcare, education, rural development, and environmental sustainability.
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Business Standard
3 days ago
- Business
- Business Standard
SBI eyes ₹25,000 crore via record QIP, sets floor at 2.5% discount
State Bank of India (SBI), the largest lender in the country, has launched a share sale to institutional investors to raise upto ₹25,000 crore, the biggest qualified institutional placement (QIP) so far by an Indian firm, and has set a floor price of ₹811.05, which is at a 2.5 per cent discount on Wednesday's closing price. Separately, the bank's board approved another ₹20,000 crore fund raise by issuing bonds. Life Insurance Corporation, Singapore's GIC, Capital International, and ICICI Prudential AMC are some of the investors in the share sale, investment-banking sources said. This is the first QIP by the banking major since 2017, when it had raked in ₹15,000 crore. The fund raise, aimed at supporting growth, will add over 60 basis points to its capital adequacy ratio, which was 14.25 per cent as on March 31, 2025, analysts said. The government holds 57.43 per cent in SBI, and that is likely to come down to about 55 per cent after the share sale. 'The issue price will be determined in consultation with book running lead managers,' it said, adding it might offer a discount of not more than 5 per cent on the floor price calculated for the issue. Citigroup Global Capital Markets, Morgan Stanley India, HSBC Securities, ICICI Securities, Kotak Investment Banking, and SBI Caps are the issue's lead managers. SBI's market capitalisation has gone up from ₹3.25 trillion at the end of March 2021 to ₹7.13 trillion at the end of March 2025, according to its 'Analysts Presentation' for 2024-25. Market capitalisation based on Wednesday's closing price was ₹7.42 trillion. The bank's board, which met on Wednesday, approved issuing Basel III-compliant Additional Tier-I and Tier-II bonds, up to ₹20,000 crore to domestic investors during FY26. The fund raise is subject to the Government of India's approval, SBI informed the stock exchanges. SBI's capital adequacy ratio stood at 14.25 per cent with Common Equity Tier-I of 10.81 per cent, Additional Tier-I of 1.3 per cent, and Tier-II of 2.14 per cent and as of March 2025, according to the Annual Report for FY25. Its advances grew 12.03 per cent year-on-year (Y-o-Y) in FY25 to ₹42.21 trillion and deposit books 9.48 per cent Y-o-Y to ₹53.82 trillion in FY25. According to the Reserve Bank of India's data, SBI's market share in aggregate domestic deposits was 22.60 per cent and that in aggregate domestic advances was 19.72 per cent at end of March 31, 2025. Its risk-weighted assets rose to ₹36.49 trillion at the end of March 2025 from ₹32.22 trillion a year earlier.
Mint
3 days ago
- Business
- Mint
SBI on mega fundraising drive: To raise ₹45,000 cr in debt, equity in FY26
Mumbai: The State Bank of India is on a mega fundraising drive in FY26, with plans to tap both the debt and equity markets for up to ₹ 45,000 crore to beef up its capital ratios. The state-owned lender's board on Wednesday approved raising up to ₹ 20,000 crore through Basel III-compliant additional tier-I (AT1) and tier-II bonds. That comes even as the qualified institutional placement (QIP) of the bank's shares opened for subscription—its first since FY18 when it raised ₹ 18,000 crore. State Bank of India (SBI) has set the floor price for the QIP at ₹ 811.05 per equity share. The board approval for bond issues is part of SBI's annual capital planning, which includes QIPs of up to ₹ 25,000 crore. SBI chairman C.S. Setty had said earlier that the bank annually passes an enabling resolution to strike a balance between growth needs and strengthening its common equity tier-I (CET1) capital, Mint reported in June. While the bank does not currently require capital to meet CRAR (capital adequacy ratio) norms for credit growth, it remains open to raising equity capital if a favourable opportunity arises. Setty added that the timing remains uncertain, as the bank is looking for the 'right value'. SBI's capital adequacy ratio or risk buffer stood at 14.25% as of March against the regulatory requirement of 12.1%. Still, the bank lags peers like HDFC Bank (19.6%) and Bank of Baroda (17.2%). AT1 bonds, also known as perpetual bonds, do not have a maturity date but come with a call option, typically after five years. Tier-I bonds contribute to a bank's core capital ratio, while tier-II bonds contribute to the overall capital CRAR. Core capital and CRAR are part of a bank's risk buffers. A total of ₹ 8,000 crore was raised in FY25 via tier-I bonds by SBI and Canara Bank. On the other hand, banks mobilized a cumulative ₹ 37,870 crore through tier-II bonds last fiscal, of which ₹ 36,500 crore was raised by public sector lenders, as per data by Rockfort Fincap LLP. SBI was the largest issuer of bank bonds in FY25, raising a cumulative ₹ 27,500 crore. Of this, ₹ 5,000 crore through AT1 bonds and ₹ 22,500 crore through multiple tranches of tier-II bonds. With the estimated fundraising for FY26, the public sector lender is expected to be the largest bond issuer this year as well, according to market experts. So far in FY26, ICICI Bank and Dhanlaxmi Bank have tapped the bond market, both raising funds via tier-II instruments. SBI's AT1 bond issue, when it happens, will be the first for FY26. Experts say overall bond issuances through AT1 and tier-II bonds are likely to be lower compared with last fiscal due to a slowdown in credit growth. As such, AT-1 bonds are typically given by public sector banks, given their high trust factor due to sovereign backing. Initially popular with private banks as well, when introduced, issuances by private banks took a hit after the crash of Yes Bank in March 2020, which led to a write-down of such bonds and hit investor confidence for such paper issued by private sector lenders. 'FY2025 was a record year with ₹ 1.3 lakh crore of bond issuances. Within this, infrastructure bonds dominated issuances with a volume of over ₹ 90,000 crore,' said Anil Gupta, senior vice president & co-group head, financial sector ratings at Icra Ltd. 'During the last decade, public sector banks accounted for around 60% of issuances, and private banks made up the remaining 40%. But last year, the share of issuance by private banks dropped significantly to just 7.0%.' Gupta said that given the slowdown in credit growth, the bond issuances from banks are likely to moderate in FY26, and are likely to be dominated by public sector banks, while their private peers may focus on calibrating growth amid market conditions and elevated credit-deposit (CD) ratios. 'As most banks are well capitalised, and their internal accruals are sufficient to meet growth requirements, the share of issuances of debt capital instruments like AT1 or tier-II is likely to remain muted in overall issuances," he said. AT1 bonds generally carry a higher coupon compared with tier-II bonds due to their elevated risk profile. AT1 bonds are also generally rated at least one notch below comparable tier-II issuances as these instruments can be written down. PSU banks appear to be in no rush to tap the bond markets this year, even though several of them have already secured board approvals to raise funds, a routine annual process that doesn't always translate into immediate issuances, said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP. He said that not a single PSU bank has tapped the bond market so far in this financial year, in sharp contrast to the ₹ 39,000 crore they collectively raised during the same period last year. 'The reason for the delay is the prevailing surplus liquidity in the banking system. With credit offtake still moderate and deposit flows remaining robust, banks are sitting on comfortable liquidity buffers and don't feel the urgency to borrow. This is also reflected in the soft overnight rates and short-term money market yield,' said Srinivasan. He added that AT1 issuances continue to remain muted. Investor appetite for AT1s, which are perpetual in nature and carry loss-absorption features, including potential write-offs, has weakened significantly. This is largely due to earlier high-profile write-downs, both domestically and globally. These Basel III-compliant instruments now face credibility concerns, especially when the yields offered do not sufficiently compensate for the embedded risks. In this context, several PSU banks may prefer to raise capital through QIPs. These equity issuances help improve capital adequacy and also align with the government's disinvestment objectives by gradually diluting public sector ownership. State-owned banks have been actively raising funds via QIPs to help the government meet a regulatory deadline for divestment of stake in state-owned entities
