SBI gets board nod to raise up to Rs 60,000 crore via bonds

Shares of State Bank of India (SBI) ended higher on Thursday after the country's largest lender approved a plan to raise up to Rs 60,000 crore through debt instruments during FY27. The stock also remained in focus after draft papers for the National Stock Exchange's (NSE) proposed initial public offering (IPO) showed SBI would be the largest selling shareholder in the offer.

SBI shares closed at Rs 1,042.50 on the NSE, up 1.56 per cent or Rs 16 from the previous close. During the session, the stock touched an intraday high of Rs 1,045.95.

Board approves Rs 60,000 crore fundraising

In an exchange filing, SBI said its Central Board approved raising up to Rs 60,000 crore through the issuance of various debt instruments in Indian rupees and/or foreign currencies during FY27.

The fundraising may be carried out through long-term bonds, Basel III-compliant Additional Tier-1 (AT1) bonds and Basel III-compliant Tier-2 bonds. The bank said the issuance could take place through public offerings or private placements depending on market conditions.

The proposed fundraising programme will be subject to necessary approvals, including those from the Government of India wherever required.

According to the lender, the capital raised will support future business growth and strengthen its overall capital position.

Debt issuance to include domestic and overseas investors

The bank said it may tap both domestic and international investors as part of the fundraising exercise. By using multiple debt instruments, SBI will have greater flexibility in managing its capital requirements while maintaining regulatory capital ratios.

Banks typically use AT1 and Tier-2 bonds to strengthen their capital base without diluting existing shareholders' equity holdings.

NSE IPO brings additional focus on SBI

Apart from the fundraising announcement, investors also tracked developments related to the much-awaited NSE IPO.

Draft papers filed for the public issue showed that SBI plans to sell 2.48 crore shares in the exchange through the offer for sale (OFS). The proposed IPO does not include any fresh issue of shares and is entirely an OFS by existing shareholders.

Among all shareholders participating in the issue, SBI is set to be the largest seller.

The bank currently owns a 3.23 per cent stake in NSE, while its subsidiary SBI Capital Markets holds an additional 4.35 per cent stake.

MS Strategic (Mauritius) Limited is the second-largest selling shareholder and plans to offload 1.60 crore shares through the offering.

LIC to retain its stake

Life Insurance Corporation of India (LIC), the largest shareholder in NSE with a 10.72 per cent stake, will not participate in the offer for sale, according to the draft documents.

The decision means LIC will continue to remain the exchange's biggest shareholder after the IPO.

Strong long-term performance

SBI has delivered strong returns to investors over the past few years. The stock has gained around 32 per cent over the last one year and approximately 152 per cent over the past five years.

The latest fundraising approval is expected to provide the bank with additional resources to support credit growth and business expansion. Meanwhile, the proposed stake sale in NSE could unlock value from one of SBI's key strategic investments.

Thursday's gains suggest investors viewed both developments positively, helping the stock outperform the broader market and close near its day's high.