India’s biggest lender the State Bank of India (SBI) is likely to raise Rs 3,000-Rs 5,000 crore by selling perpetual bonds, a quasi-debt instrument. This indicates that the lender has likely begun its expansion in lending.
The bank would be selling such bonds after a year and the securities are likely to offer 9.3-9.7 percent, reveal industry sources. The terms for the procedure are yet to be finalised. SBI Cap is providing assistance in the sale.
The bonds will be available on the stock exchange bidding platform in the next few weeks. For gauging the demand, the bank has already reached out to its investors and domestic arrangers.
“The proposed bond sale may take a few weeks’ time, especially after the outcome of the RBI board meeting. The bank is now looking for a finer rate, maybe around 9.5 percent,” said a person with knowledge of the matter.
In the three months ended September, SBI reported a profit after three consecutive quarters of losses as provisions slowed and retail and corporate loans grew.
Its net profit was earlier Rs 945 crore as compared with a Rs 4,876 crore loss in the preceding quarter, although it was 40 percent lower than Rs 1,582 crore reported a year earlier.
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