SBIN

Corrects dateline to February 16

By Sudarshan Varadhan, Gopika Gopakumar and Jatindra Dash

SINGAPORE/MUMBAI/BHUBANESWAR, India, Feb 16 (Reuters) - Indian Prime Minister Narendra Modi's push to accelerate the rollout of rooftop solar power is falling short of targets despite heavy subsidies due to loan delays and limited support from state utilities, vendors and analysts say.

The shortfalls represent the latest challenge to India's efforts to nearly double clean energy capacity to 500 gigawatts by 2030, and come as the government plans to suspend clean energy tendering targets amid a mounting backlog of awarded projects yet to be built.

Challenges to plans to increase solar uptake may mean India maintains its reliance on coal-fired power.

India's Ministry for New and Renewable Energy created its subsidy programme for residential solar panel installations in February 2024, covering up to 40% of the costs.

But residential installations at 2.36 million are well below the ministry's target of 4 million by March, according to data from the programme's website.

"Banks' reluctance to lend and states' hesitance to promote the schemes could derail India's efforts to transition away from coal," said Shreya Jai, the lead energy analyst at research firm Climate Trends in New Delhi.

Roughly three in five rooftop solar applications filed on the scheme's website are yet to be approved while about 7% have been rejected, according to government data on the programme, known as the PM Surya Ghar.

In a statement to Reuters about the pending applications, the renewable energy ministry pointed to accelerating installations which have benefited over 3 million households, and said the scheme enables state-owned utilities to reduce subsidy payouts to keep residential power bills in check.

"The loan rejection rate varies across states," the statement said.

Under PM Surya Ghar, consumers apply and select a vendor who handles paperwork and arranges bank financing for solar panels. After loan approval and installation, the vendor submits proof, after which the government subsidy is credited to the bank.

BANK DELAYS

However, banks have been rejecting or delaying loans for numerous reasons including lack of documentation, which they say is necessary to protect public funds.

"We are working with the government to push for some standard documentation, because it is necessary to avoid bad loans. Currently if loans go bad, banks can take away these panels but what will we do with these panels?" said a senior official at a major government-owned bank.

Chamrulal Mishra, a solar vendor in the eastern Indian state of Odisha, said applications are often rejected because the customer has missed electricity payments or because land records are still in the name of deceased relatives.

Residents there dispute the claims that they have missed payments, which they attribute to administrative errors after a change in utility ownership decades prior.

A spokesperson for India's Department of Financial Services, which regulates the country's banks, said they have responded to consumer feedback to allow co-applicants for loans to clear up title claims and the simplification of documentation requirements.

The Renewable Energy Association of Rajasthan said some banks are making collateral demands for loans under 200,000 Indian rupees ($2,208.87), despite scheme guidelines not requiring them to, which is constraining solar power additions.

State Bank of India and Punjab National Bank, some of the country's largest lenders, did not reply to requests for comment on the matter.

State-owned utilities are also not promoting rooftop solar as much, as they are concerned about the loss of revenue as sales move off the electric grid.

"Wealthier households typically have high electricity consumption, tariffs and reliable roof access. When they shift from the grid, it leaves a larger financial burden," said Niteesh Shanbog, an analyst at Rystad Energy.

($1 = 90.5440 Indian rupees)

(Reporting by Sudarshan Varadhan in Singapore, Gopika Gopakumar in Mumbai and Jatindra Dash in Bhubaneswar; Additional reporting by Saurabh Sharma and Sethuraman NR in New Delhi, and Jose Devasia in Kochi; Editing by Christian Schmollinger)

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Updates with closing levels, adds chart

** Shares of State Bank of India SBI.NS close 0.52% higher at 1,198.6 rupees

** India's largest lender by assets gained 12% for the week, its biggest weekly gain since early February, 2021

** The stock also hit multiple record highs through the week, driven by strong Q3 earnings and increase in FY26 credit growth guidance

** On Wednesday, SBI overtook TCS TCS.NS to become India's fourth-largest company by market cap

** 38 analysts on avg rate SBI "buy", their median PT is 1210 rupees

** Stock up 22% so far in 2026

(Reporting by Nishit Navin in Bengaluru)

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** Shares of India's ICICI Bank ICBK.NS rise 1.2% to surpass market capitalisation of Tata Consultancy Services TCS.NS

** IT major now sixth biggest Indian company by market cap after losing two spots in two days; shares down 3.7%

** TCS' market cap drops to 10.13 trillion rupees ($111.92 billion), while that of ICICI Bank rises to 10.18 trillion rupees ($112.47 billion)

** IT bellwether hit by broader sell-off in IT stocks due to fears of AI disruption and fading U.S. rate cut hopes

** Nifty IT index .NIFTYIT down 4.3%

** Reliance Industries RELI.NS, HDFC Bank HDBK.NS and Bharti Airtel BRTI.NS and State Bank of India SBI.NS are the India's top four firms, respectively, in terms of market cap

($1 = 90.5150 Indian rupees)

(Reporting by Vivek Kumar M)

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** State Bank of India SBI.NS becomes fourth-largest Indian company by market capitalisation

** Shares of India's largest lender rise 3.4% on the day, pushing market cap to 10.92 trillion rupees ($120.36 billion), per exchange data

** Pips IT bellwether TCS TCS, which fell 2.5% on Wednesday, taking its market cap to 10.52 trillion rupees

** SBI up 7% this week after upbeat Q3 earnings, while TCS is up 1.5%

** Reliance Industries RELI.NS, HDFC Bank HDBK.NS and Bharti Airtel BRTI.NS are the top three, respectively, in terms of market cap

($1 = 90.7275 Indian rupees)

(Reporting by Vivek Kumar M)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Feb 10 (Reuters Breakingviews) - A record run of listings is doing little to shore up investment banking fortunes in India. Citi and JPMorgan passed up working on a $1.4 billion float last month by SBI Funds Management, India's largest asset manager, after the issuer set fees at 0.01% of the issue size, Bloomberg reported citing sources. Such state-backed issuers are usually stingy but the hottest private issuers in 2026 are likely to offer slim pickings too.

Fees are growing but remain well short of desirable levels. Net revenue from India's $23 billion of initial public offerings amounted to 1.7% of proceeds in 2025, up from 1.4% a year earlier, Dealogic data show. Underwriters in the U.S. typically command between 4% and 7%.

And while India is now delivering a consistent pipeline of sizeable deals, extracting the measly fees on offer is painful. ICICI Prudential Asset Management's IICL.NS $1.4 billion offering in December was shepherded by 18 banks.

Fees also are increasingly split into equal fixed and variable components tied to the quality of investors a bank brings to a transaction. Roughly one-fifth of the total payout is reserved as a discretionary bonus issuers can choose to hold back. In practice, robust demand for Indian stock means these incentives and bonuses are mostly paid but they suck up time to negotiate.

Firms working on prospective blockbuster deals - such as Reliance Industries' RELI.NS planned offering of Jio Platforms, handled by Morgan Stanley and Kotak Mahindra Bank, per a Reuters report, and National Stock Exchange - won't be spoilt for riches either.

Choosing deals well can be rewarding. Foreigners remain among the few willing to pay for advice. IT exporter Hexaware Technologies HEXW.NS, acquired by global private equity firm Carlyle CG.O in 2021, paid 2.5% to Kotak and Citi for its $1 billion listing, for example. Mandates on the Indian listings of multinationals' local subsidiaries, such as Hyundai Motor India HYUN.NS and LG Electronics India LGEL.NS, have been lucrative too.

Those fees, though, are unlikely to push much higher if the rest of the market is stingy.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

Citi and JPMorgan pulled out of a planned $1.4 billion initial public offering by SBI Funds Management over low fees, Bloomberg reported on January 7, citing unnamed people familiar with the matter. SBI Funds later replaced Citi with Jefferies, the report added. Sellers State Bank of India and France’s Amundi offered fees of about 0.01% of the issue size after some domestic advisers quoted only a token fee for the mandate, the report said.

(Additional reporting by Aditya Srivastav; Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

Updates for market close

By Vivek Kumar M

Feb 9 (Reuters) - Indian shares rose on Monday after an interim framework for a trade deal with the United States and strong earnings from the country's largest lender State Bank of India lifted sentiment, with positive global cues adding support.

The Nifty 50 .NSEI rose 0.68% to 25,867.3 and the BSE Sensex .BSESN added 0.58% to 84,065.75.

Fifteen of the 16 major sectors advanced, while the small-cap .NIFSMCP100 and mid-cap .NIFMDCP100 indexes gained 2.6% and 1.6%, respectively.

State Bank of India SBI.NS, the country's largest public lender, jumped 7.5% to a record high and topped gains on the Nifty 50 after reporting better-than-expected quarterly profit and raising its full-year loan growth outlook.

The move lifted PSU bank stocks .NIFTYPSU 3.3% and financials .NIFTYFIN 1.3%.

Analysts said broadly positive earnings, particularly among mid- and small-cap companies, were also supporting market sentiment.

"Most sectors saw acceleration in (sales, EBITDA and profit), with small caps being the clear outperformer. Earnings downgrades are moderating and upgrades should begin soon," IIFL Capital said.

Export-linked sectors like textiles, seafood, jewellery and aerospace suppliers jumped after the U.S. and India moved closer to a trade pact on Friday, releasing an interim framework that would lower tariffs, reshape energy ties and deepen economic cooperation as both countries seek to realign global supply chains.

"The interim trade framework is a sentimental positive for markets. It cements the faith around the deal considering that there has been a lot of mixed news flows around tariffs over the last year," said Dharmesh Kant, head of equity research at Cholamandalam Securities.

Elsewhere, Asian stocks .MIAPJ0000PUS jumped 2.1% on Monday as a resounding win for Japanese Prime Minister Sanae Takaichi whetted appetites for more reflationary policies, while there was widespread investor relief at Wall Street's last gasp rebound. MKTS/GLOB

(Reporting by Vivek Kumar M; Editing by Sherry Jacob-Phillips, Harikrishnan Nair and Janane Venkatraman)

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Feb 7 - State Bank of India SBI.NS:

• STATE BANK OF INDIA - WILL CONTINUE TO MAINTAIN NET INTEREST MARGINS ABOVE 3%

• STATE BANK OF INDIA EXECUTIVE SAYS - WILL CONTINUE TO MAINTAIN NET INTEREST MARGINS ABOVE 3%

• SBI EXECUTIVE - TO REVISE CREDIT GROWTH TARGET TO 15% FROM 12% POST US TRADE DEAL, BUDGET ANNOUNCEMENTS

• SBI EXECUTIVE - RECEIVED 22 BILLION RUPEES AS DIVIDEND FROM SBI MUTUAL FUND IN Q3

Source text: [ID:]

Further company coverage: SBI.NS

By Dharamraj Dhutia

MUMBAI, Feb 5 (Reuters) - Indian lenders are pushing the central bank to a change its liquidity regulations to ease a deposit shortfall amid rising bond yields, five treasury officials said.

The Reserve Bank of India has cut the repo rate by 125 basis points since February 2025, but the benchmark 10-year yield remains close to last year's levels. Banks have also struggled to reduce lending rates as deposit growth has lagged credit demand.

The RBI is widely expected to keep rates unchanged on Friday.

Despite the RBI's record liquidity injections, banks remain short of funds as the central bank's FX interventions have absorbed a large amount of rupee liquidity. This makes lenders reluctant to replace government bonds sold through open market operations, keeping yields elevated.

Banks are, therefore, seeking a delay in liquidity coverage ratio norms (LCR), due from April 1, and greater flexibility to shift bonds between held-to-maturity (HTM) and trading portfolios, the treasury officials said, declining to be identified as they are not authorised to speak to the media.

Lenders also want part of the cash reserve ratio (CRR) to count as high‑quality liquid assets, permission to raise longer‑tenor bulk deposits, and the continuation of debt purchases, they said.

The suggestions have been made in meetings with the RBI over the last few days, the officials added.

The central bank did not respond to a Reuters email seeking comment.

Revised LCR rules have compounded banks' funding pressures. The rules, which come into effect from April 1, require banks to maintain a buffer of 2.5% on digitally-linked deposits, which treasury officials have suggested be delayed.

Bankers say some regulatory leeway on LCR could ease pressure by pushing back the implementation date.

Treasurers are also asking for more flexibility to sell securities from their held-to-maturity portfolios beyond those tendered via open market operations.

Since April 2024, the central bank has tightened investment rules, requiring banks to get board and RBI approval to sell securities from these portfolios, where securities are not marked to market prices.

Traders say this has made banks, especially state-run ones, reluctant to buy bonds aggressively, which has contributed to the recent rise in yields.

Banks keep 3% of their total deposits with the RBI as CRR and want a part of that to count as high-quality assets, another kind of buffer that banks are required to hold.

"Currently, banks are permitted to issue CDs of up to one-year maturity. There is continuous rollover pressure and with rise in short-term rates, banks' asset-liability management (ALM) gets impacted," said Neeraj Gambhir, executive director - treasury, markets and wholesale banking products, Axis Bank.

Allowing banks to issue up to three-year certificates of deposits (CD) will help banks with better asset-liability management, he said.

(Reporting by Dharamraj Dhutia; Editing by Sonia Cheema)

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Adds details and background from paragraph 2 onwards

Feb 4 (Reuters) - Indian private lender Yes Bank YESB.NS said on Tuesday that the Reserve Bank of India has approved the appointment of Vinay Muralidhar Tonse as the company's managing director and CEO for a three-year term.

Tonse, who headed retail operations at State Bank of India SBI.NS until November 30, will succeed Prashant Kumar, whose extended term is expected to end on April 6.

Last year, Japan's Sumitomo Mitsui Banking Corporation 8316.T acquired a 24% stake in the Mumbai-based lender, marking one of the largest overseas investments by a Japanese financial institution as it seeks growth after years of low interest rates at home.

In March 2020, Kumar was appointed MD and CEO after Yes Bank was rescued by lenders amid a pile-up of bad loans stemming from its exposure to troubled shadow lenders and real estate companies.

(Reporting by Meenakshi Maidas in Bengaluru; Editing by Sherry Jacob-Phillips)

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** Shares of India's SBI Cards and Payment Services SBIC.NS fall 1.14% to 773.50 rupees

** Co posted 45% rise in Q3 profit after tax to 5.57 billion rupees ($60.51 million), helped by higher consumer spending on credit cards during the Indian festive season

** Brokerage Jefferies ("buy", PT at 880 rupees) says profit beat estimates on lower provisions, with easing stress and improving credit costs, but flags slower receivables and fee growth as a drag on earnings outlook

** JP Morgan ("underweight", PT revised to 820 rupees from 855 rupees) says co's weak receivables growth, softer fee income and rising acquisition costs keep it cautious

** Trading vols at 1.81 mln shares vs 30-day-avg of 1.15 mln shares

** Stock rated "hold" on avg by 23 analysts, median PT at 880 rupees - data compiled by LSEG

** SBIC gained ~30% in 2025, stock down about 10% so far in Jan

($1 = 92.0570 Indian rupees)

(Reporting by Surbhi Misra in Bengaluru)

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Adds details on annualised premium equivalent and new business growth from paragraph 6 onwards

Jan 28 (Reuters) - India's SBI Life Insurance SBIL.NS reported a near 5% rise in third-quarter profit on Wednesday, aided by higher premium collections as tax cuts spurred retail demand for insurance products.

The insurer's net profit rose to 5.77 billion rupees ($62.87 million) for the three months ended December 31, from 5.51 billion rupees a year earlier.

Indian insurers saw higher demand in the third quarter after taxes on life insurance products were lowered to zero from 18% earlier, according to analysts.

SBI Life's net premium income grew 22% to 302.45 billion rupees. One-time premiums rose 24%, while premiums from older policies that were renewed jumped nearly 21%.

Its management expenses, however, rose more than 45% to 35.19 billion rupees, driven by a 28% rise in commissions paid to agents and a 36.6% rise in employee-related costs.

Annualised premium equivalent sales, a key metric that conveys the annualised total value of all single and recurring premium policies, rose nearly 25% to 86 billion rupees during the quarter, according to a Reuters calculation.

Analysts at Motilal Oswal expected strong growth in SBI Life to be driven largely by its bancassurance channel, in which the company sells products through banking partners.

This channel, particularly State Bank of IndiaSBI.NS's extensive branch network, contributed 62% to the overall APE of the insurer as of December-end.

The GST exemption on individual policies contributed to improved affordability and aided demand during the quarter, SBI Life CEO Amit Jhingran said in a statement.

SBI Life's value of new business, or expected profit from new policies, increased 22.5% for the quarter, per Reuters' calculation.

However, the government's move to do away with GST for insurance products hurt margins as insurers can no longer claim input tax credit.

This resulted in margins from new business contracting to 27.2% for the nine months ended December from 27.8% as of September-end.

($1 = 91.7750 Indian rupees)

(Reporting by Nishit Navin; Editing by Mrigank Dhaniwala and Sonia Cheema)

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Updates with more details

By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, Jan 21 (Reuters) - State Bank of India's mutual fund unit has committed to pick up at least 10% of Adani Power's ADAN.NS nearly $820 million rupee-denominated bond issue, likely to be launched later this week, three merchant bankers said on Wednesday.

The mutual fund, India's biggest in terms of assets under management, is acting as one of the anchor investors for the issue, with a commitment of 7.50 billion rupees, the bankers said, requesting anonymity as they are not authorised to speak to the media.

The planned 75 billion-rupee issue would be the group's largest-ever rupee bond sale.

SBI Mutual Fund and Adani Power did not respond to email queries.

Adani Power is looking to raise 28.60 billion rupees through a two-year option and 26.90 billion rupees via a three-year note.

SBI MF will buy 4.50 billion rupees and three billion rupees of these papers as the anchor investor, the bankers said.

The Adani unit will pay a coupon of 8.00% and 8.20% on the two- and three-year bonds, and 8.30% and 8.40% on four- and five-year papers.

The remaining 6.75 billion rupees and 12.75 billion rupees will be raised through four- and five-year papers, respectively, the bankers said.

Trust Investment Advisors, ICICI Bank and Axis Bank are the arrangers for the issue.

The lenders have will also back the issue by providing commitments worth 3.31 billion rupees and 3 billion rupees, respectively, the bankers said.

The banks did not reply to an email seeking comment.

The bonds are rated 'AA' by Crisil and India Ratings, with the coupons set to step up by 25 basis points for every notch rating downgrade.

Earlier this financial year, another group company, Adani Ports and Special Economic Zone APSE.NS, raised 50 billion rupees by placing 15-year bonds directly with Life Insurance Corporation of India LIFI.NS.

($1 = 91.5630 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Sonia Cheema)

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MUMBAI, Jan 17 (Reuters) - Indian private lender Yes Bank YESB.NS reported a sharp jump in its third quarter profit on Saturday, helped by a drop in provisions for bad loans and other contingencies.

The Mumbai-based bank, in which Japan's Sumitomo Mitsui Banking Corporation 8316.T bought a 24% stake last year, posted a standalone net profit of 9.52 billion Indian rupees ($104.87 million) for the three months ended December, a 55% increase compared with 6.12 billion rupees a year earlier.

The deal marked one of the major overseas investments by a Japanese financial institution as they look to secure new sources of growth after years of rock-bottom interest rates at home.

Profits jumped as the bank reduced provisions for bad loans and other contingencies by 91% to 2.2 billion rupees after a few quarters of building buffers on its balance sheet.

Yes Bank's net interest income rose 10.8% to 24.65 billion rupees compared with 22.23 billion rupees, as domestic loans grew 5.2%. Deposits rose 5.5% in line with loan growth.

Yes Bank's net interest margin, a key measure of a bank's profitability, rose to 2.6% from 2.5% in the previous quarter, as deposit costs started to drop as a result of India's central bank reducing key interest rates by 125 basis points since February 2025.

The lender's asset quality remained stable with gross non-performing asset ratio at 1.5% at the end of December, compared with 1.6% at the end of September.

($1 = 90.6820 Indian rupees)

(Reporting by Ashwin Manikandan and Ira Dugal in Mumbai; Editing by Jacqueline Wong)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Shritama Bose

MUMBAI, Jan 8 (Reuters Breakingviews) - India's sizzling market for initial public offerings is sparking friction. Fund managers including Aberdeen ABDN.L, Capital and the asset management business of Nomura quietly boycotted e-commerce retailer Meesho's MEES.NS market debut in December after a unit of State Bank of India SBI.NS grabbed a hefty slice of the 54.2 billion rupees ($596 million) deal reserved for anchor investors. The standoff highlights growing pains within the country's $900 billion mutual fund industry.

SBI Funds Management, which oversees $139 billion of assets, picked up about a quarter of the shares Meesho offered to anchor investors, IFR reported at the time. That's more than twice the share a single buyer typically gets in a large offering. Among others walking out in protest were Norway's Norges Bank Investment Management and Nippon Life India as well as SBI compatriot ICICI Prudential Asset Management IICL.NS. For the issuer, a fight to own its stock is not a problem.

It does suggest a mismatch, however. SBI, which runs its investment unit in partnership with France's Amundi AMUN.PA, sweeps up roughly 15% of the 299 billion rupees ($3.32 billion) the industry gets every month in subscription payments towards equity funds, known as systematic investment plans. Inflows are set to increase as Indians become more affluent and move more of their money from bank deposits to the financial markets. SIPs, for example, are growing 25% annually, per Crisil Intelligence. And because of capital controls, Indians' growing wealth is largely captive to the domestic financial markets.

Large IPOs provide an easy opportunity to put that money to work because they let asset managers buy large chunks of stock in one shot, typically not an option with already listed companies. Trouble is, the amount of equity capital raised in IPOs and private placements is far more uneven than SIPs' growth. Proceeds last year were $55 billion, 20% below the 2024 tally, per Dealogic data. Analysts at Axis Capital expect demand for stock to overshoot supply in the next financial year.

That means more Meesho-style tussles between investors are likely. In the short term, that might push up valuations - shares in Meesho have jumped 64% since last month's IPO. Longer term, unless the supply of quality companies - and future earnings power - keeps up with the pace of financialisation, asset prices risk getting inflated. The Meesho spat is an early sign of potential distortions.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

Major Indian and global asset managers boycotted the anchor tranche of Indian e-commerce company Meesho's 54.2 billion rupees initial public offering in protest at what they saw as an unfairly generous allocation to SBI Funds Management, IFR reported on December 5, citing unnamed people familiar with the transaction.

Aberdeen, Capital, Norges Bank Investment Management, Nomura Asset Management and mutual fund units of asset managers ICICI Prudential and Nippon India were among those that chose to withdraw from the anchor tranche rather than get fewer shares than they wanted, the report added.

Funds managed by SBI were allotted around 24.6% of shares in Meesho offered to anchor investors, according to the company's filings with stock exchanges.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

-- Source link: https://bit.ly/49rvPui

-- Note: Reuters has not verified this story and does not vouch for its accuracy

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-- Note: Reuters has not verified this story and does not vouch for its accuracy

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Dec 17 (Reuters) - State Bank of India SBI.NS:

• STATE BANK OF INDIA - RE-APPOINTS ASHWINI KUMAR TEWARI, AS MANAGING DIRECTOR

Source text: ID:nNSEt8QTx

Further company coverage: SBI.NS

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Nov 13 (Reuters) - State Bank of India SBI.NS:

• STATE BANK OF INDIA - SUBSCRIBED 510,000 SHARES OF RAAJMARG INFRA INVESTMENT MANAGERS VIA RIGHTS ISSUE

Source text: ID:nNSE25QtWM

Further company coverage: SBI.NS

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Nov 12 (Reuters) - CARE Ratings Ltd CREI.NS:

• CARE RATINGS - APPROVED SALE OF PARTIAL STAKE IN CAREEDGE GLOBAL IFSC TO SBI AND NSE IFSC FOR 59.4 MILLION RUPEES

Source text: ID:nNSE21wJcn

Further company coverage: CREI.NS

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** State Bank of India SBI.NS down 0.3% in early trade; Q2 results due later in the day

** Analysts expect India's top lender by assets to post ~5% rise in profit, 11.7% rise in rev - data compiled by LSEG

** Nomura sees healthy loan and deposit growth; NIMs to dip ~8 basis points q/q, credit cost steady at 0.5%, with margins and growth outlook key monitorables

** ICICI Securities says RBI's recent measures to ease business and enhance resilience are likely to benefit SBI and large private banks, especially via expected credit loss (ECL) flexibility, acquisition funding, and regulatory rollbacks

** Co's asset quality remains stable with benign credit costs (~0.4%), supported by strong recoveries and high provisioning, unlike stress seen in mid-sized banks, says JM Financial

** 38 analysts have a "buy" rating on avg ; median PT is 950 rupees - data compiled by LSEG

** YTD, SBI up 19.3%

(Reporting by Urvi Dugar in Bengaluru)

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The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.

By Shritama Bose

MUMBAI, Oct 20 (Reuters Breakingviews) - The largest-ever foreign direct investment in India's banking sector comes with a formidable brief. Dubai-based Emirates NBD ENBD.DU on Saturday agreed to pump in about $3 billion to acquire a controlling stake in RBL Bank RATB.NS. It's a bargain for the Mumbai-headquartered lender, which has fought past the worst of its asset quality problems. The infusion could potentially supercharge the target’s growth across multiple business lines, but the challenges are steep.

The deal includes a preferential issue of up to 60% and an open offer to buy up to 26% of RBL's expanded equity capital from its public shareholders. At 280 rupees ($3.19) apiece, the offer values RBL's shares at 1.1 times its average book value for the year ending March 31, per analysts at brokerage Emkay. That's lower than the 1.3 and 1.4 times multiples on which rivals like Warburg Pincus-backed IDFC First IDFB.NS and Sumitomo Mitsui Banking-backed Yes Bank YESB.NS trade.

Emirates NBD's low-ball offer probably accounts for lingering troubles in RBL's microloans and credit card portfolios, which have weighed on returns. The target's 0.51% return on assets last year was less than half those of similarly sized City Union Bank CTBK.NS and Federal Bank FED.NS, and its return on common equity has been below 10% for the past six financial years. The stock traded as high as 319 rupees on Monday, suggesting shareholders are betting there will be a higher bid.

By boosting RBL's common equity tier 1 ratio to nearly 40% in one shot, the deal gives the bank oodles of capital to turbocharge its lending and other businesses. The hope is that this gives it a chance to break out of an infinite loop of high-cost funds and high-risk assets shackling India's small private banks. Emirates NBD also sports a higher credit rating, which will open the door to prime mortgage customers, a wealth business and to financing Indian companies that are expanding along the emerging trade corridor through the Middle East to Europe.

RBL CEO R. Subramaniakumar and his team hope that will drive up return on equity to an annualised 10% by the second half of the financial year to March 31, 2028, a person close to the bank's thinking told Breakingviews. That optimism is hard to translate into reality. India's hypercompetitive mortgage market is dominated by behemoths HDFC Bank HDBK.NS and State Bank of India SBI.NS, and a growing shift of household assets to financial markets is attracting new players into the wealth business, including a joint venture between Jio Financial Services JIOF.NS and BlackRock BLK.N.

RBL's success in weathering a post-Covid credit quality morass has earned it a rare shot at breaking out of its peer group. Living up to it will be its next big test.

Follow Shritama Bose on LinkedIn and X.

CONTEXT NEWS

Emirates NBD has agreed to acquire a controlling stake in India's RBL Bank through a primary infusion of approximately $3 billion, the latter said on October 18.The investment will be made via a preferential issue of up to 60%, the statement added.

The Dubai-based bank on the same day announced an open offer to acquire 415.59 million shares of RBL, or 26% of its expanded voting share capital, from its public shareholders. The offer values RBL's shares at 280 rupees apiece.

(Editing by Antony Currie; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

MUMBAI, Oct 17 (Reuters) - State Bank of India SBI.NS has accepted bids worth 75 billion rupees ($853.73 million) for Basel III compliant tier II bonds maturing in 10 years, three bankers said on Friday.

The state-run bank will pay an annual coupon of 6.93% on this issue and had invited bids from bankers and investors earlier in the day, and will have a call option at the end of five years, they said.

The lender did not reply to a Reuters email seeking comment.

Here is the list of deals reported so far on October 17:

*Size includes base plus greenshoe for some issues

($1 = 87.8500 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Janane Venkatraman)

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MUMBAI, Oct 16 (Reuters) - State Bank of India SBI.NS (SBI) plans to raise up to 75 billion rupees ($855.2 million), which includes a greenshoe option of 25 billion rupees, through sale of Basel III-compliant tier II bonds maturing in 10 years, three bankers said on Wednesday.

The state-run bank has invited bids from bankers and investors for the issue on Friday, and will have a call option at the end of five years, they said.

The lender did not reply to a Reuters email seeking comment.

Here is the list of deals reported so far on October 16:

*Size includes base plus greenshoe for some issues

($1 = 87.7030 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Sumana Nandy)

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By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, Oct 10 (Reuters) - India's largest bank is set to return to the rupee debt market after a year with plans to raise funds through Basel III-compliant tier II bonds this month, three sources familiar with the matter said on Friday.

State Bank of India SBI.NS is in advanced stages of issuing the bonds with a 10-year duration to raise as much as 75 billion rupees (about $845.7 million), the sources said. The lender may invite bids before the end of the month, they added.

SBI did not immediately respond to a Reuters request for comment. The sources declined to be named as they are not authorised to speak to media.

The bonds will have a call option at the end of five years, and at the end of every year thereafter, the sources said.

"The issue would be priced as per a five-year instrument, and currently, there is sufficient gap between five-year and 10-year bond yields, which must have pushed them towards the shorter tenor," one of the sources said.

Merchant bankers said that mutual funds could bid aggressively for the issue.

SBI had planned the tier II bond issue by August but delayed it due to the rise in yields. The bank also shelved an infrastructure bond issue in March due to elevated yields.

($1 = 88.6870 Indian rupees)

(Reporting by Dharamraj Dhutia, Khushi Malhotra; Editing by Mrigank Dhaniwala)

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By Bharath Rajeswaran and Nishit Navin

BENGALURU, Oct 9 (Reuters) - Indian banks are poised to report subdued earnings for the September quarter, weighed down by tepid loan demand across retail and corporate segments and margin contraction due to rate cuts by the central bank, analysts said.

The Reserve Bank of India has lowered its interest rate by 100 basis points this year to revive consumption and investment amid a slowing economy. Rate cuts tend to squeeze banks' margins in the short term, as lenders reduce loan rates faster than they adjust deposit rates.

Analysts forecast private banks to post a year-on-year decline in profit in the September quarter, while net interest income (NII) may see only a marginal uptick.

Sector-wide profit is forecast to fall 7%-12% year-on-year in the quarter, with state-owned banks underperforming larger peers.

Jefferies estimates profits of large banks will fall 12% year-on-year, after posting an 8% growth in the year-ago quarter and a marginal 2% growth in the June quarter.

The brokerage forecasts 5% drop in profit for private lenders and a 20% decline for public sector banks. It expects loan growth at roughly 11% and a flat NII.

Axis Bank AXBK.NS will kick off the banking sector earnings on October 15, followed by Federal Bank FED.NS, ICICI Bank ICBK.NS, IDFC Bank IDFB.NS, IndusInd Bank INBK.NS later in the week.

"Asset quality trends are likely to remain stable due to controlled slippages and robust provision coverage ratios," said Nitin Aggarwal of Motilal Oswal.

Nomura added that stress in unsecured retail and microfinance portfolios remains elevated but delinquency trends are improving, although a gradual profit recovery is likely from the second half of fiscal 2026.

Loan growth is expected to remain muted at around 10% in the September quarter, with corporate and big-ticket retail demand still soft.

Rising bond yields are also likely to weigh on treasury income. "With bond yields rising, treasury gains will not cushion earnings in the September quarter," Axis Securities said.

Analysts expect a recovery from the second half of fiscal year 2026, driven by stronger consumption, government tax relief, and faster growth in unsecured credit.

"We expect the September quarter to mark a turning point, with earnings momentum improving from the December quarter onwards as margin pressure eases and asset quality trends strengthen," said Ankit Bihani, analyst at Nomura.

With the RBI keeping rates unchanged in recent meetings, banks' margins are expected to get some relief from the ongoing quarter as borrowing costs fall and deposit rates adjust.

Banks .NSEBANK, private lenders .NIFPVTBNK and state-owned banks .NIFTYPSU have gained 10.1%, 10.6% and 15% year-to-date, outperforming the Nifty 50's .NSEI 6% rise.

(Reporting by Nishit Navin and Bharath Rajeswaran; Editing by Eileen Soreng)

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** Shares of SBI Cards and Payment Services SBIC.NS rise 2.5% to 927 rupees, highest since July 14

** RBI proposes to reduce risk weights on some loans like housing and credit cards

** Risk weighted assets reduce to 75% from 150% is positive for SBI Cards, will release almost 450bps of capital - Macquarie

** Motilal Oswal says corporate, retail spends to grow at a healthy pace after GST cuts; expects SBIC asset quality to improve gradually

** Stock rated "hold" on avg by 25 analysts covering it; median PT at 935 rupees - data compiled by LSEG

** YTD, SBIC up 40% vs Nifty Financial index's .NIFTYFIN nearly 14% rise

(Reporting by Komal Salecha)

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** Shares of KPI Green Energy KPIG.NS rise 2% to 474.40 rupees

** Renewable power generation co secures sanction of 32 bln rupees ($361.1 mln) from State Bank of India SBI.NS

** The funds will part-finance development of 250 MW solar project and 370 MW hybrid project in Gujarat

** Projects are secured by 25-year long-term power purchase agreements with Gujarat Urja Vikas Nigam

** Trading vol so far is more than 613,700 vs 30-day average of 472,826

** KPIG down ~13% YTD

($1 = 88.6190 Indian rupees)

(Reporting by Vijay Malkar)

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