SBI share price tanks 4%, Rs 36,000 crore mcap wiped out — What’s spooking investors?

Shares of State Bank of India fell sharply on March 23, 2026, after the lender disclosed receiving a tax demand notice, triggering selling pressure in the stock.

The stock declined 3.74 per cent to Rs 1,018.40 during the session. It has now fallen 4.44 per cent over the past one week and is down 16.98 per cent in the last one month, indicating sustained weakness.

Why are SBI Shares Falling Today?

Add Zee Business as a Preferred Source

The decline comes after the bank informed exchanges that it has received an income tax demand of Rs 6,337 crore, including interest, for the assessment year 2023–24. The order, dated March 19, 2026, was issued by the Income Tax Department following scrutiny assessment proceedings.

According to the filing, the demand arises from disallowances made by the assessment unit on multiple grounds. The bank also said that similar matters are already under litigation for previous years.

Following the disclosure, investor sentiment remained cautious, leading to a sharp fall in the stock price during the trading session.

SBI Mcap Erodes

The impact of the fall was visible in the bank’s market valuation. The company’s market capitalisation stood at Rs 9,40,876.85 crore. The 3.74 per cent drop in the share price resulted in an estimated erosion of around Rs 36,000 crore in the market capitalisation in a single day.

The stock has also corrected significantly from its recent highs. From its 52-week high of Rs 1,234.70 touched on February 24, 2026, the stock has declined by Rs 216.30, or about 17.52 per cent.

What Bank Said?

Despite the tax demand, the bank clarified that the order does not have any impact on its operations or other business activities. It said it will challenge the demand and take necessary steps, including filing an appeal before the appropriate appellate authorities within the prescribed timelines.

SBIFML IPO

Separately, the bank is also in focus due to developments related to its asset management arm. SBI Funds Management Limited (SBIFML), a subsidiary of State Bank of India, has filed a draft red herring prospectus with the Securities and Exchange Board of India for an initial public offering.

The proposed IPO includes up to 203,709,239 equity shares, representing up to 10.0013 per cent of SBIFML’s paid-up equity share capital. The issue is entirely an offer for sale by existing shareholders.

State Bank of India plans to sell up to 128,334,397 shares, or 6.3007 per cent stake, while Amundi India Holding will divest up to 75,374,842 shares, or 3.7006 per cent.

The number of shares to be sold by the bank has been revised upwards due to an increase in SBIFML’s equity base following bonus share issuance and ESOP exercises, while maintaining the same percentage stake.

SBI Share Price Target

Shares of State Bank of India remain in focus amid mixed signals from ground-level checks, even as the brokerage Motilal Oswal Financial Services maintained a positive view on the lender, citing strong execution in key segments.

According to MOFSL, channel checks for 4QFY26 indicate that SBI continues to lead in MSME lending among PSU banks, supported by healthy credit demand and strong on-ground execution. “SBI leads execution, with robust demand visible in MSME lending,” the brokerage said, adding that the bank is benefiting from competitive pricing and improved underwriting practices.

The report noted that MSME credit demand remains healthy, with PSU banks gaining market share due to repo-linked lending rates and support from the CGTMSE scheme. SBI, in particular, is seeing strong traction, with direct selling agents reporting steady pipeline build-up and improved borrower quality.

On unsecured lending, MOFSL said the segment is witnessing a gradual recovery after a phase of stress. “Unsecured business loan growth is showing a mild recovery as incremental stress stabilises,” it said.

However, lenders, including SBI, are continuing with tighter credit filters and cautious underwriting. The brokerage has maintained a ‘Buy’ rating on SBI with a target price of Rs 1,300, implying potential upside of 27 per cent from current levels.