State Bank of India is set to become the first bank to tap the market for perpetual bonds in 2026, with plans to raise ₹5,000 crore ($517.76 million) within the next two weeks. According to reports from The Hindu BusinessLine, three bankers familiar with the matter confirmed that the country's largest lender is in advanced talks with merchant bankers and investors to issue Basel III-compliant additional Tier I perpetual bonds with a five-year call option. The bankers indicated that if things work out, the bank should complete the issuance next week or at least before the central bank's monetary policy decision on August 5.
State-run Canara Bank was the last lender to tap the market, raising ₹3,500 crore through Basel III-compliant additional Tier I perpetual bonds at a 7.55% coupon in November 2025. As reported by The Hindu BusinessLine, SBI last issued perpetual bonds in October 2024, raising ₹5,000 crore at a 7.98% coupon with a 10-year call option. This upcoming issuance will mark SBI's return to the perpetual bond market after nearly two years, with the bankers requesting anonymity as the matters are private while SBI did not reply to a Reuters email seeking comment.
In June, SBI's board approved raising up to ₹60,000 crore rupees through debt this financial year, including long-term infrastructure bonds, Basel III-compliant additional Tier I securities and Tier II instruments. According to The Hindu BusinessLine, this perpetual bond issuance is part of the bank's broader funding strategy to meet its capital requirements and support growth initiatives. The timing of this issuance aligns with the bank's strategic planning for the current financial year.
As per the latest market data, State Bank of India is trading at ₹1,015.50 with a market capitalization of ₹934,923.1 crore. The bank maintains a PE ratio of 11.68 and EPS of ₹86.7. The upcoming perpetual bond issuance represents a significant funding initiative for India's largest public sector bank as it navigates the current market conditions.
