SBI board approves raising ₹20,000 crore via bonds; shares rally 2%

Shares of State Bank of India (SBI) surged 2 percent during intraday trading on Tuesday, July 16, following the bank’s approval to raise ₹20,000 crore through bond issuance. This marks SBI’s first significant capital-raising initiative since 2017, aimed at reinforcing its capital base amid regulatory requirements.

In a regulatory filing, SBI confirmed that its Central Board approved the raising of up to ₹20,000 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 primarily focuses on strengthening the bank’s capital base rather than financing expansion or growth activities.

Separately, in May 2025, SBI’s board sanctioned plans to raise equity capital of up to ₹25,000 crore during FY2026. This capital raise will occur through 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—a critical measure of the bank’s financial health.

The proposed QIP will lead to a dilution of the government’s stake, which stood at 57.43 percent 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.

Following the bond announcement, SBI’s stock climbed to a day’s high of ₹833.90, edging closer to its 52-week high of ₹898.80 recorded in July 2024. The stock is approximately 7 percent below that peak, having reached a 52-week low of ₹679.65 in March 2025.

In recent months, SBI shares have been steadily gaining momentum. The stock posted gains of 1 percent in July, continuing a five-month streak of positive returns. Earlier months saw increases of 1 percent in June, 3 percent in May, 2.22 percent in April, and a significant 12 percent jump in March. Prior to this uptrend, the stock had declined by 11 percent in February and 2.7 percent in January.

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