SBI to raise ₹10,000 cr via infra bonds

The share of the country's largest lender State Bank of India (SBI) surged a day after the PSU bank said it's planning to raise ₹10,000 crore via a public issue or private placement in the current financial year. The fundraising also includes a greenshoe option of ₹5,000 crore.

"To seek approval for raising of Infrastructure Bonds up to an amount of ₹10,000 crores (including a green shoe option of ₹5,000 crores) through a public issue or private placement, during FY23," SBI informed via stock exchanges.

The agenda will be taken up during the executive committee meeting of the central board of the State Bank of India on Tuesday, November 29, 2022.

The SBI stock opened a gap-up at ₹610.60 and rose to the intra-day high of ₹613.50. The stock is trading lower than its 52-week high of ₹622.9 achieved on November 7, 2022. With an m-cap of ₹5.4 lakh crore, SBI is the 7th biggest company in India. Its stock has given a 24.83% return in one year; 30.07% in the year-to-date period; 34.85% in the past six months; and 5.84% in the past month.

Shares of State Bank of India (SBI) reported better-than-expected earnings for the September quarter of the current fiscal (Q2 FY23). The PSU lender posted its highest-ever quarterly profit after tax (PAT) in July-September 2022, driven by strong loan growth and improved asset quality. 

SBI's quarterly profit stood at ₹13,264.62 crore, up 74% year-on-year (YoY) from ₹7,626.57 in the year-ago period. The total income rose to ₹88,733.86 crore, up 14% from ₹77,689.09 crore in the corresponding quarter last year. On a consolidated basis, its profit stood at ₹14,752 crore, thus becoming the most profitable company in Q2, beating Reliance Industries whose net earnings were ₹13,656 crore in the said quarter.

"The bank is targeting double-digit loan growth between 14-16% in the current financial year. This quarter was a busy season. That is why we had a strong credit growth. But I still expect, going by the current trend, we should have credit growth of 14-16% in the current financial year,” said SBI chairman Dinesh Khara. 

Khara, during SBI's Banking and Economics Conclave on Wednesday, said it won't be difficult for banks to continue growing the credit book at the current pace provided they understood the risks. As per the RBI's data, for the fortnight ending October 21, 2022, the non-food credit rose 18.3% YoY against the deposit growth of 9.5%. 

Meanwhile, ratings agency Fitch Ratings had last month affirmed SBI's long-term issuer default rating (IDR) at 'BBB-', while giving a stable outlook. The agency also affirmed its viability rating at 'bb' and its government supporting rating at 'bbb-'. "The long-term IDR on SBI is support-driven, with the GSR above the bank's VR, which is the highest among Indian state banks.