SBI’s Next Big Leap: Equity Raising Talks Spark Excitement on Dalal Street

State Bank of India (SBI), India's largest lender, is set to consider a large equity raising proposal for the year 2025-26, indicating its willingness to fuel growth in the future and enhance its capital buffer. The development follows the bank delaying a scheduled ₹15,000 crore ($1.7 billion) bond issue in the last fiscal year on account of higher yields, deciding to hold back for better market conditions.

 

Important Points:

 

Equity Raising in the Pipeline: SBI will consider a new equity raising strategy for FY26 to strengthen its capital adequacy and fund projected advances, deposits, and earnings growth. Management is eager to raise funds at the right time after postponing last year's fundraising amid steep borrowing costs.

 

Growth Prospect Continues Firm: SBI is anticipated by analysts to keep the growth trajectory firm, seeing steady gains in advances, deposits, and net interest income, 11–13% CAGR during FY25–27. The bank's profitability run remains strong with earnings growth estimates at 9% CAGR during the period.

 

Market Timing is Key: SBI’s decision to shelve its earlier ₹15,000 crore bond plan was driven by persistently high yields, with the bank now eyeing more favorable conditions in the coming fiscal. This strategic patience is designed to optimize fundraising costs and maximize shareholder value.

 

Analyst Confidence: Market analysts have a positive view of SBI based on its strong fundamentals and growth potential. The bank's efforts to raise capital are viewed as critical to supporting expansion and complying with regulatory norms.

 

Sources: Economic Times, Axis Securities, CNBC-TV18