The state-run lender will raise funds in one or more tranches through a public offer or a private placement of senior unsecured notes, which will be denominated in U.S. dollars or another major foreign currency. The Mumbai-based lender did not specify the intended use of the proceeds. Indian banks are bolstering their capital bases to meet the rising demand for loans. Several state-run lenders, including Canara Bank, Punjab and Sind Bank, and Punjab National Bank, also plan to raise funds via debt this fiscal year.
In January, the State Bank of India (SBI) raised 50 billion rupees (approximately $600 million) by selling Basel III-compliant additional tier-I perpetual bonds. The lender is also open to raising equity capital to support growth, as Chairman Dinesh Kumar Khara stated last month.
SBI's shares increased by 0.8% on Tuesday and have gained 30.5% so far this year.
