Context:
State Bank of India (SBI) has decided to defer its plan to raise ₹15,000 crore through bond issuance in the current fiscal year (ending March).
Reason for Deferral
- High bond yields despite
- A 25 bps policy repo rate cut by the Reserve Bank of India (RBI)
- Significant liquidity infusion by the RBI
- Yields on AAA-rated 10-year corporate bonds have risen by 15 basis points since early February.
Planned Fundraising
- Originally intended to raise
- ₹5,000 crore via Basel III-compliant additional Tier-I perpetual bonds
- ₹10,000 crore via 15-year infrastructure bonds
Current Decision
- SBI has:
- Assessed its asset-liability position
- Chosen to postpone fundraising to the next fiscal year (starting April)
- The bank will reassess funding needs at that time.
Source: BL
