State Bank of India (SBI) Share Price Outlook 2018: Should you Buy?

State Bank of India (NSE:SBIN) stock is losing from the last three days and has fallen -1.01% in the period. However, seeing the flow of capital over the past years, out of the total capital infusion of ₹ 19 trillion, State Bank of India, has received the most capital, Rs26,948 crore, or about 22.7% of the total infusion. Therefore SBI share price is expected to continue to rise.

SBI Ratings

Moody’s Investors Service has upgraded the long-term ratings of State Bank of India to Baa2 from Baa3. Further, Moody had upgraded the Counterparty Risk Assessment (CR Assessment) of SBI, its Hong Kong, London and Nassau branches to Baa2(cr)/P-2(cr) from Baa3(cr)/P-3(cr).

Moody has also assigned a CR Assessment of Baa2(cr)/P-2(cr) to State Bank of India, DIFC branch. In addition, Moody’s has changed to stable from positive the ratings outlook for SBI and its Hong Kong, London, and Nassau branches. Moody has also assigned a stable outlook to SBI’s DIFC branch.

Moody’s rating actions follow the upgrade of the Government of India’s local and foreign currency issuer ratings to Baa2 from Baa3 on 16 November 2017.

State Bank of India Fund Raising Program

India’s one of the valuable PSU, State Bank of India has planned to raise up to $2 billion (over Rs. 12,600 crore) by issuing bonds in US dollar or other convertible currency. The bank will raise this over the next two fiscal years to fund its overseas expansion. This will take place through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during the period.

The executive committee of the Central Board has approved its long term fund-raising in single/multiple tranches up to USD 2 billion. As of 31st March 2017, SBI had total overseas assets amounting to ₹3.6 lakh crore. The total overseas revenue in FY17 was of ₹10,683 crore.

Moreover, the bonds issued by SBI attract lot of interest from the foreign investors. Therefore, the pricing on SBI’s bonds are among the lowest that an Indian issuer has to pay. The global bond yields are expected to rise and the US Fed is expected to hike rates at least two times in 2018.  As a result, the yields on foreign currency bonds from India might also rise along with them if the US Treasury yields surge.

SBI Share price Outlook

Long term investors can buy the stock and short term investors also can take position on the stock. The stock has a fair valuation and the analyst expects the SBI share price to reach INR 340 in the next six to 12 months.

 

Disclaimer: The article is in no way an advice to buy or sell any stock; rather it provides a base for the investor’s own research. Consult with a registered investment advisor, prior to making any trading/investing decision of any kind.