Kumud Das Mumbai

SBI Board will be meeting here to discuss fundraising plan for the ongoing financial year in its forthcoming board meeting to be held on June 18.

The fund raising will happen through public offer or private placement mode by way of issuance of debt instrument (including capital instruments) to overseas and/or Indian investors in INR or any foreign currency. This is the routine yearly board approval plan. Depends upon the funding requirements, they will borrow funds from markets within the board approved limits

Talking to Bizz Buzz, MV Hariharan, former treasury head, State Bank of India says, “Great idea. Good time to raise capital at competitive and sharp pricing. The brand equity of the Bank will enable humongous advantages as additional gamechangers. Tenors will be important and with the ongoing Fx crunch, investors will queue up,” he said.

However, one critical caveat is the fund-raising efforts of entities overseas; which might dampen the interest as well as availability of funds. Coupons on offer are the tipping points towards SBI. Smart and agile deployment, he added.

Fundraising routes include Public issue, Private placement, Instruments that may be issued, Bonds and other debt securities, Capital instruments such as Additional Tier-1 (AT1) bonds and Tier-2 bonds Securities denominated in Indian Rupees or foreign currencies. Investor base for the bank’s fund-raising plan include both Indian and Overseas investors as well. What this means? Well, no immediate dilution for shareholders as the proposal refers mainly to debt and capital instruments, not equity issuance.

Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors says, “SBI may raise resources to fund credit expansion and meet regulatory capital requirements.” Board approval provides an enabling framework; actual issuances can occur in tranches depending on market conditions and funding costs. Potential instruments for the fund-raising may comprise Infrastructure bonds, Basel III-compliant AT1 bonds, Tier-2 bonds, Foreign currency bonds or medium-term notes.

For the Indian bond market, another large SBI issue could absorb liquidity and serve as a benchmark for pricing. Given the current strong demand for high-quality PSU issuers—as seen in recent successful bond placements—SBI may be able to raise funds at attractive rates.

Foreign currency borrowing would also diversify SBI’s funding sources and potentially lower overall funding costs if overseas market conditions are favourable. The June18 board meeting is expected to decide only the overall fundraising plan for FY26-27; details such as the amount, instrument type, maturity and timing are likely to be announced subsequently. Venkatakrishnan Srinivasan, Founder and Managing Partner, Rockfort, says, “Depends upon the funding requirements, they will borrow funds from markets within the board approved limits.”