New Delhi: State Bank of India (SBI) on Wednesday said it has raised Rs 4,691 crore via Basel III compliant Additional Tier 1 (AT-1) bond issuance to fund business growth.

This is the first Tier I bonds issuance in the ongoing financial year and the paper carries a coupon rate of 7.75 percent.

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The tenor of these bonds is perpetual with call option after 5 years and each anniversary date thereafter, SBI said in a statement.

This issue attracted a robust response from investors with bids of more than 2 times against the base issue size of Rs 3,000 crore, it said, adding, the total number of bids received was 89, indicating participation from diverse set of qualified institutional bidders.

The investors were across provident funds, pension funds, mutual funds, and banks, among others.

Commenting on the fund raising, SBI Chairman C S Setty said that wider participation and heterogeneity of bids demonstrated the trust investors place in the country's largest bank.

Based on the response, the bank has decided to accept Rs 4,691 crore at a coupon rate of 7.75 percent payable annually, it said.

This issuance is also significant as the bank has been able to diversify and raise long-term non-equity regulatory capital, it added.

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Under the Basel-III norms, AT-1 bonds come with loss absorbency features, meaning that in case of stress, banks can write off such investments or convert them into common equity if approved by the RBI.

AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by public sector banks to meet global norms on capital adequacy (Basel III).

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