SBI Defers Bond Issuance Amid High Yields, Plans to Reassess in Next Fiscal Year
State Bank of India (SBI), the country’s largest lender by assets, has decided to shelve its plan to raise up to ₹150 billion through bond sales this fiscal year, sources familiar with the matter said. The bank had intended to tap the market before March but has held back due to persistently high bond yields, despite a recent policy rate cut and liquidity infusion by the central bank. SBI will now reassess its funding requirements in the upcoming financial year starting April.
According to sources, SBI had secured board approvals to issue ₹50 billion in Basel III-compliant additional Tier-I perpetual bonds and ₹100 billion in 15-year infrastructure bonds. However, rising yields on AAA-rated 10-year corporate bonds—up by 15 basis points since early February—have made market conditions unfavorable. In contrast, state-run peers such as Bank of India, Punjab National Bank, and Bank of Maharashtra raised a combined ₹72.52 billion through infrastructure bonds in February, falling short of their original targets.
SBI last tapped the market in October 2024, raising ₹50 billion at a 7.98% yield via perpetual bonds. A bank spokesperson declined to comment on the matter, while sources indicated that SBI continues to monitor market conditions before proceeding with any fundraising activity.
Pic Courtesy: google/ images are subject to copyright
