SBI Bond Issue 2026: Rs. 6,051 Cr Raised at 7.05% Coupon; Issue Oversubscribed Nearly 2x; Shares In Focus

State Bank of India (SBI) has successfully raised Rs. 6,051 crore through its Basel III-compliant Tier II bond issuance.The fundraising was completed on Tuesday March 17 and was conducted through the NSE electronic bidding platform. It attracted major participation from institutional investors.

The SBI bond issue 2026 was oversubscribed nearly two times, against a base issue size of Rs. 5,000 crore due to strong demand in the debt market. The move is expected to further strengthen SBI's capital adequacy ratio and support its expanding lending and business operations.

SBI Tier II Bond Issue Details

The SBI Tier II bonds 2026 come with attractive features that appealed to investors:

The issue size stood at Rs. 6,051 crore, comprising 6,051 bonds with a face value of Rs. 1 crore each, and offered a coupon rate of 7.05% per annum.

These bonds carry a tenure of 10 years, with maturity scheduled for March 20, 2036, along with a call option available after five years starting March 20, 2031. The issuance has been assigned a top-tier AAA (stable) rating by CRISIL and India Ratings.

The bonds are proposed to be listed on both BSE and NSE, while the allotment and pay-in are set to take place on March 20, 2026.

Massive Demand from Institutional Investors

The SBI bond issue subscription received good interest, with around 47 bids received from major institutional investors, including mutual funds, pension funds, and banks.

Why SBI Raised Funds Through Tier II Bonds

The SBI Tier II bond issuance is part of the bank's strategy to improve its capital buffers under Basel III norms. The fundraise will also support credit growth and loan expansion

Tier II bonds are an important instrument for banks to enhance their regulatory capital, especially as lending demand rises in the economy.

SBI Share Price and Market Reaction

After the development, SBI share prices are in focus in today's trading session. SBI shares opened on March 18 at Rs. 1,067.50 a piece on the NSE UP 0.26% from the previous close of Rs. 1064.70

SBI Share Price Target

Axis Securities, in its latest report, assigned an overweight rating to SBI with a target price of Rs.1350 per shares projecting an upside of 12% for the stock.

The report stated, "SBI's performance has been the best amongst the larger banks, and the bank remains well-poised to sustain its performance. SBI has upgraded its credit growth guidance to 13-15%, driven by a strong corporate revival and resilient RAM momentum. The bank's ability to maintain margins given its disciplined risk-adjusted pricing and continued focus on retail, granular CASA deposits should enable SBI to maintain margins at >3% over the medium term. Strengthening the fee income profile, along with controlled costs driven by operational efficiency, should support earnings growth. Moreover, asset quality remains at decadal best levels, with credit costs remaining benign, further extending support to earnings. We expect SBI to deliver a strong Credit/Deposit/NII/Earnings growth of 14/11/14/9% CAGR over FY26-28E. At present, we do not see downside risks to a comfortable, sustained RoA delivery of 1+% over the medium term."