Latest news with #C.S.Setty
The Hindu
3 days ago
- Business
- The Hindu
Decision to hold rates anchored within uncertainties: SBI Chief Setty
The MPC's decision to hold rates was mostly on expected lines anchored within the uncertainties posed by the lagged response of policy, trade and bottoming of inflation in some advanced economies, said C.S. Setty, Chairman, State Bank of India (SBI) and Chairman of the Indian Banks' Association (IBA). He said while inflation would remain under check at 3.1% for FY26, growth impulse was expected to be intact despite the concerns of external demand and supply shocks. K. Balasubramanian, CEO, Citi India & Banking Head Indian Subcontinent said, 'The RBI's decision to not effect another rate cut after three successive reductions is prudent, reflecting a balanced approach amid global uncertainties. This would preserve flexibility to navigate emerging global challenges and provide time for consolidating the gains from earlier easing.' Akhil Puri, Partner, Financial Advisory, Forvis Mazars in India said, 'The RBI held the repo rate steady at 5.5% with a neutral stance, signaling a cautious equilibrium amid rising global uncertainty. The U.S.'s recent 25% tariff on Indian exports added fresh external pressure, but the RBI maintained confidence in domestic resilience.' 'CPI inflation for FY26 was revised down to 3.7% (from 4%) after June retail inflation hit a six-year low at 2.1%, suggesting a shift in underlying price dynamics. FY26 GDP growth remains robust at 6.5%, reflecting sustained domestic momentum,' he said. According to Rajiv Agrawal, Promoter and Co-Founder, Saarathi Group, 'The decision of RBI to maintain the repo rate at 5.5% is a bid to spur growth. The status quo will provide crucial support to the ongoing wave of redevelopment projects across Mumbai.' 'With no rise in cost of borrowing, real estate developers involved in cluster and society redevelopment can borrow cheaper capital enhancing the financial feasibility of complicated long-gestation projects for timely completion of projects,' he said. 'No change in the repo rate will also boost homebuyer sentiment, which is likely to spur growth in the real estate sector. We can expect more buyers to opt for homes in upcoming redevelopment projects,' he added.
Mint
21-07-2025
- Business
- Mint
SBI raises ₹25,000 cr via India's largest QIP; to issue 30.6 cr shares at ₹817 each
Mumbai: The country's largest lender State Bank of India has raised ₹ 25,000 crore through a qualified institutional placement (QIP) of its equity shares, making it the largest QIP executed in Indian capital markets. The board of the public sector bank announced the close of the QIP late Monday evening, and approved the issue and allotment of 30.6 crore shares at an issue price of ₹ 817 each. The QIP was subscribed 4.5 times, with 64.3% bids being made by foreign investors. Marquee long-term investors received around 88% of the final allocation, including 24% of the issue size getting placed with foreign long-term investors, the bank said in a release. 'This landmark equity raise is a vote of confidence in SBI's solid fundamentals, prudent risk management and digital-first growth agenda,' SBI Chairman C.S. Setty was quoted as saying in the release. The bank said it will use the proceeds from the share issue to augment its common equity tier-I (CET-1) capital buffer, which will improve to 11.50% from 10.81% as on March 31, 2025. This capital raise will support calibrated credit growth across retail, MSME and corporate segments, it added. Life Insurance Corp (LIC) of India had participated in SBI's QIP, acquiring 6.1 crore shares for ₹ 5,000 crore, the insurer informed the exchanges post market hours on Monday. LIC said it expects to receive the shares by 23 July and for them to be listed by 24 July. Post issue, the shareholding of the insurance company in SBI will rise to 9.49% of the paid-up capital of the bank from 9.21% earlier. The latest QIP is the first one for the bank since FY18, when it had raised ₹ 18,000 crore. The issue is part of SBI's mega fund-raising plan for FY26, Mint had reported on 16 July. Looking to beef up its capital ratios, the public sector bank is looking to tap both the debt and equity markets to raise up to ₹ 45,000 crore in FY26. SBI had announced its plan for a QIP in May, and the proposal was approved by its shareholders on 13 June. The issue opened for subscription on 16 July with a floor price of ₹ 811.05. Shares of the bank ended 0.2% higher today at ₹ 824.60 on the NSE. On the day of the launch of the QIP issue, SBI had also announced board approval to raise up to ₹ 20,000 crore through Basel III-compliant additional Tier-I (AT1) and Tier-II bonds, in one or more tranches. SBI was the largest issuer of bank bonds in FY25, raising a cumulative ₹ 27,500 crore. Of this, ₹ 5,000 crore through AT1 bonds and ₹ 22,500 crore through multiple tranches of tier-II bonds. With the estimated fundraising for FY26, the public sector lender is expected to be the largest bond issuer this year, as well, as per Mint's report. Against the regulatory requirement of 12.1%, SBI's capital adequacy ratio, or risk buffer, was 14.25% at the end of March, slightly lower than 14.28% a year ago. The bank still lags peers like HDFC Bank (19.6%) and Bank of Baroda (17.2%), which is the likely cause for the ongoing fund-raising drive. SBI's consolidated common equity Tier 1 ratio (CET1) improved to 11.1% as of March this year from 10.3% as of March 2022, Moody's India said in a note earlier on Monday, adding that the bank's plan to raise new equity capital and capital gains from the partial sale of its stake in YES Bank will help improve the CET1 ratio further, supporting its balance sheet buffers. The ratings agency said funding and liquidity will continue to be SBI's credit strengths, as the largest bank in India with 23% deposit market share, with most funding coming from retail deposits. In May 2025, SBI had announced that it plans to sell over 413 crore equity shares of YES Bank, or 13.19% stake, to Japan-based Sumitomo Mitsui Banking Corp. (SMBC) for ₹ 8,889 crore. SBI's strongest retail franchise amongst Indian banks, access to low-cost deposits, and sufficient holdings of liquid government securities support its funding and liquidity, Moody's said. The ratings agency upgraded SBI's Baseline Credit Assessment (BCA) and Adjusted BCA to 'baa3' from 'ba1', with a stable outlook on the ratings. 'The upgrade of the bank's BCA is driven by our expectation that the bank's internal capital generation, along with opportunistic external capital raise, will improve its capitalization over the next 12-18 months, bringing its standalone credit profile in line with the other similarly rated peers,' the note said, pegging the bank's loan growth at 12% for FY26, in line with the industry level growth.
News18
17-07-2025
- Business
- News18
SBI Launches Rs 25,000 Crore QIP To Boost Capital Base; Key Points To Know
If fully subscribed, this would surpass Coal India's Rs 22,560-crore QIP in 2015, becoming India's biggest-ever share sale via this route. SBI's board approved the QIP on Wednesday — the third in the bank's history, following a Rs 15,000-crore issue in 2017. Among expected bidders are state-run Life Insurance Corporation of India (LIC), large domestic mutual funds, financial institutions, and international investors. LIC, which holds a 9.3% stake in SBI as of March 31, had picked up nearly 40% of the 2017 QIP. The central government, SBI's majority shareholder, owns 56.9% of the bank, as per its latest annual report. Analysts estimate the government's holding could fall to around 55% post-issue. Strengthening Capital Buffers, Not Just for Growth The QIP is aimed at bolstering SBI's common equity tier I (CET-1) capital ratio by around 60 basis points. SBI Chairman C.S. Setty previously said that the bank's existing capital could support additional credit growth of nearly Rs 8 lakh crore, and that the QIP is meant to strengthen the capital base, not fund immediate growth. As of March-end, SBI's CET-1 ratio stood at 10.81%, above the regulatory minimum, while its overall capital adequacy ratio (CAR) was 14.25%. However, this is still lower compared to some private sector peers. QIP Lead Managers and Additional Bond Raise
Mint
16-07-2025
- Business
- Mint
SBI on mega fundraising drive: To raise ₹45,000 cr in debt, equity in FY26
Mumbai: The State Bank of India is on a mega fundraising drive in FY26, with plans to tap both the debt and equity markets for up to ₹ 45,000 crore to beef up its capital ratios. The state-owned lender's board on Wednesday approved raising up to ₹ 20,000 crore through Basel III-compliant additional tier-I (AT1) and tier-II bonds. That comes even as the qualified institutional placement (QIP) of the bank's shares opened for subscription—its first since FY18 when it raised ₹ 18,000 crore. State Bank of India (SBI) has set the floor price for the QIP at ₹ 811.05 per equity share. The board approval for bond issues is part of SBI's annual capital planning, which includes QIPs of up to ₹ 25,000 crore. SBI chairman C.S. Setty had said earlier that the bank annually passes an enabling resolution to strike a balance between growth needs and strengthening its common equity tier-I (CET1) capital, Mint reported in June. While the bank does not currently require capital to meet CRAR (capital adequacy ratio) norms for credit growth, it remains open to raising equity capital if a favourable opportunity arises. Setty added that the timing remains uncertain, as the bank is looking for the 'right value'. SBI's capital adequacy ratio or risk buffer stood at 14.25% as of March against the regulatory requirement of 12.1%. Still, the bank lags peers like HDFC Bank (19.6%) and Bank of Baroda (17.2%). AT1 bonds, also known as perpetual bonds, do not have a maturity date but come with a call option, typically after five years. Tier-I bonds contribute to a bank's core capital ratio, while tier-II bonds contribute to the overall capital CRAR. Core capital and CRAR are part of a bank's risk buffers. A total of ₹ 8,000 crore was raised in FY25 via tier-I bonds by SBI and Canara Bank. On the other hand, banks mobilized a cumulative ₹ 37,870 crore through tier-II bonds last fiscal, of which ₹ 36,500 crore was raised by public sector lenders, as per data by Rockfort Fincap LLP. SBI was the largest issuer of bank bonds in FY25, raising a cumulative ₹ 27,500 crore. Of this, ₹ 5,000 crore through AT1 bonds and ₹ 22,500 crore through multiple tranches of tier-II bonds. With the estimated fundraising for FY26, the public sector lender is expected to be the largest bond issuer this year as well, according to market experts. So far in FY26, ICICI Bank and Dhanlaxmi Bank have tapped the bond market, both raising funds via tier-II instruments. SBI's AT1 bond issue, when it happens, will be the first for FY26. Experts say overall bond issuances through AT1 and tier-II bonds are likely to be lower compared with last fiscal due to a slowdown in credit growth. As such, AT-1 bonds are typically given by public sector banks, given their high trust factor due to sovereign backing. Initially popular with private banks as well, when introduced, issuances by private banks took a hit after the crash of Yes Bank in March 2020, which led to a write-down of such bonds and hit investor confidence for such paper issued by private sector lenders. 'FY2025 was a record year with ₹ 1.3 lakh crore of bond issuances. Within this, infrastructure bonds dominated issuances with a volume of over ₹ 90,000 crore,' said Anil Gupta, senior vice president & co-group head, financial sector ratings at Icra Ltd. 'During the last decade, public sector banks accounted for around 60% of issuances, and private banks made up the remaining 40%. But last year, the share of issuance by private banks dropped significantly to just 7.0%.' Gupta said that given the slowdown in credit growth, the bond issuances from banks are likely to moderate in FY26, and are likely to be dominated by public sector banks, while their private peers may focus on calibrating growth amid market conditions and elevated credit-deposit (CD) ratios. 'As most banks are well capitalised, and their internal accruals are sufficient to meet growth requirements, the share of issuances of debt capital instruments like AT1 or tier-II is likely to remain muted in overall issuances," he said. AT1 bonds generally carry a higher coupon compared with tier-II bonds due to their elevated risk profile. AT1 bonds are also generally rated at least one notch below comparable tier-II issuances as these instruments can be written down. PSU banks appear to be in no rush to tap the bond markets this year, even though several of them have already secured board approvals to raise funds, a routine annual process that doesn't always translate into immediate issuances, said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP. He said that not a single PSU bank has tapped the bond market so far in this financial year, in sharp contrast to the ₹ 39,000 crore they collectively raised during the same period last year. 'The reason for the delay is the prevailing surplus liquidity in the banking system. With credit offtake still moderate and deposit flows remaining robust, banks are sitting on comfortable liquidity buffers and don't feel the urgency to borrow. This is also reflected in the soft overnight rates and short-term money market yield,' said Srinivasan. He added that AT1 issuances continue to remain muted. Investor appetite for AT1s, which are perpetual in nature and carry loss-absorption features, including potential write-offs, has weakened significantly. This is largely due to earlier high-profile write-downs, both domestically and globally. These Basel III-compliant instruments now face credibility concerns, especially when the yields offered do not sufficiently compensate for the embedded risks. In this context, several PSU banks may prefer to raise capital through QIPs. These equity issuances help improve capital adequacy and also align with the government's disinvestment objectives by gradually diluting public sector ownership. State-owned banks have been actively raising funds via QIPs to help the government meet a regulatory deadline for divestment of stake in state-owned entities
Mint
16-07-2025
- Business
- Mint
SBI on mega fundraising drive: To raise ₹45,000 cr in debt, equity in FY26
Mumbai: The State Bank of India is on a mega fundraising drive in FY26, with plans to tap both the debt and equity markets for up to ₹ 45,000 crore to beef up its capital ratios. The state-owned lender's board on Wednesday approved raising up to ₹ 20,000 crore through Basel III-compliant additional tier-I (AT1) and tier-II bonds. The board approval for the bond issues comes even as the qualified institutional placement (QIP) of the bank's shares opened for subscription—its first since FY18 when it raised ₹ 18,000 crore. State Bank of India (SBI) has set the floor price for the QIP at ₹ 811.05 per equity share. The board approval for bond issues is part of the bank's annual capital planning, which includes QIPs of up to ₹ 25,000 crore. SBI chairman C.S. Setty had said earlier that the bank annually passes an enabling resolution to strike a balance between growth needs and strengthening its common equity tier-I (CET1) capital, Mint reported in June. While the bank does not currently require capital to meet CRAR (capital adequacy ratio) norms for credit growth, it remains open to raising equity capital if a favourable opportunity arises. Setty added that the timing remains uncertain, as the bank is looking for the 'right value'. SBI's capital adequacy ratio or risk buffer stood at 14.25% as of March against the regulatory requirement of 12.1%. Still, the bank lags peers like HDFC Bank (19.6%) and Bank of Baroda (17.2%) as of March. AT1 bonds, also known as perpetual bonds, do not have a maturity date but come with a call option, typically after five years. Tier-I bonds contribute to a bank's core capital ratio, while tier-II bonds contribute to the overall capital adequacy ratio (CRAR). Core capital and capital adequacy are part of a bank's risk buffers. A total of ₹ 8,000 crore was raised in FY25 via tier-I bonds by SBI and Canara Bank. On the other hand, banks mobilized a cumulative ₹ 37,870 crore through tier-II bonds, of which ₹ 36,500 crore was raised by public sector banks, as per data by Rockfort Fincap LLP. SBI was the largest issuer of bank bonds in FY25, raising a cumulative ₹ 27,500 crore during the year. Of this, ₹ 5,000 crore through AT1 bonds and ₹ 22,500 crore through multiple tranches of tier-II bonds. With this estimated fundraising for FY26, the public sector lender is expected to be the largest bond issuer this year as well, according to market experts. So far in FY26, ICICI Bank and Dhanlaxmi Bankhave been the only banks to tap the bond market, both raising funds via tier-II instruments. SBI's tier-I bond issue, when it happens, will be the first for the current financial year. Experts say the overall bond issuances through AT1 and tier-II are likely to be lower compared to last year due to a slowdown in credit growth. As such, AT-1 bonds are typically given by public sector banks, given their high trust factor due to sovereign backing. Initially popular with private banks as well, when introduced, issuances by private banks took a hit post the crash of Yes Bank in March 2020, which led to a write-down of such bonds and hit investor confidence for such paper issued by private sector lenders. 'FY2025 was a record year with ₹ 1.3 lakh crore of bond issuances. Within this, infrastructure bonds dominated issuances with a volume of over ₹ 90,000 crore,' said Anil Gupta, senior vice president & co-group head, financial sector ratings at Icra Ltd. 'During the last decade, public sector banks accounted for around 60% of issuances, and private banks made up the remaining 40%. But last year, the share of issuance by private banks dropped significantly to just 7.0%.' Gupta said that given the slowdown in credit growth, the bond issuances from banks are likely to moderate in FY26, and are likely to be dominated by public sector banks, while their private peers may focus on calibrating growth amid market conditions and elevated credit-deposit (CD) ratios. 'As most banks are well capitalised, and their internal accruals are sufficient to meet growth requirements, the share of issuances of debt capital instruments like AT1 or tier-II is likely to remain muted in overall issuances," he said. AT1 bonds generally carry a higher coupon compared with tier-II bonds due to their elevated risk profile. AT1 bonds are also generally rated at least one notch below comparable tier-II issuances as these instruments can be written down. PSU banks appear to be in no rush to tap the bond markets this year, even though several of them have already secured board approvals to raise funds, a routine annual process that doesn't always translate into immediate issuances, said Venkatakrishnan Srinivasan, founder and managing partner of Rockfort Fincap LLP. He said that not a single PSU bank has tapped the bond market so far in this financial year, in sharp contrast to the ₹ 39,000 crore they collectively raised during the same period last year. 'The reason for the delay is the prevailing surplus liquidity in the banking system. With credit of take still moderate and deposit flows remaining robust, banks are sitting on comfortable liquidity buffers and don't feel the urgency to borrow. This is also reflected in the soft overnight rates and short-term money market yield,' said Srinivasan. He added that AT1 issuances continue to remain muted. Investor appetite for AT1s, which are perpetual in nature and carry loss-absorption features, including potential write-offs, has weakened significantly. This is largely due to earlier high-profile write-downs, both domestically and globally. These Basel III-compliant instruments now face credibility concerns, especially when the yields offered do not sufficiently compensate for the embedded risks. In this context, several PSU banks may prefer to raise capital through QIPs. These equity issuances help improve capital adequacy and also align with the government's disinvestment objectives by gradually diluting public sector ownership. State-owned banks have been actively raising funds via QIPs to help the government meet a regulatory deadline for divestment of stake in state-owned entities Punjab National Bank raised ₹ 5,000 crore via a QIP in September 2024, and Bank of Maharashtra fetched ₹ 3,500 crore the following month. This year, Indian Overseas Bank raised ₹ 1,436 crore via a QIP that ended on 25 March. UCO Bank, Punjab & Sind Bank, and Central Bank raised a total of about ₹ 2,000 crore from their QIPs in the last quarter of FY25.
