The bond sale could reach ₹10,000 crore, with a base size of ₹3,000 crore and a green shoe option of ₹7,000 crore, the sources said. The bonds may have a call option after 10 years and the issue date could be June 29.
Last week, the SBI board approved a fundraising worth ₹50,000 crore through the sale of bonds in the current financial year.
After a successful dollar bond issue in April, SBI is unlikely to go the overseas bond route just yet as aggressive rate hikes in global markets central banks fueled volatility in international markets bond markets.
“Something should happen by July; it usually takes about 3-4 weeks to get government approval. Given the way futures are behaving, dollar-denominated bonds don’t have as much sense that INR bonds right now for SBI. They are looking at the three options in Tier 1, Tier 2 and Infrastructure bonds,” a source said.
By the end of April, SBI had successfully tapped the global bond markets and closed the issue of $750 million of securities with a 5-year term at a coupon of 4.875% payable semi-annually. The spread between US bonds of relevant maturity and SBI bonds was seen as aggressive, indicating firm demand for the public bank’s debt supply, Treasury officials said.
In the prior fiscal year, SBI began selling AT-1 bonds in September.
HDFC completed a major debt sale on Monday, raising funds worth ₹13,187 crore through 10-year bonds. HDFC’s bond coupon was set at 7.75%, while the issue’s arrangers were Axis Bank And ICICI Bank, HDFC said in an exchange filing. On Monday, the yield on the benchmark 10-year government bond closed at 7.02%. Government bond yields are the benchmarks used to price corporate debt.
Meanwhile, the National Agricultural and Rural Development Bank (NABARD) is expected to tap the debt capital markets this week to raise up to ₹5,000 crore.