SBI Raises ₹25,000 Crore via QIP in Record-Breaking Capital Infusion.
Banking & Finance
State Bank of India recently raised ₹25,000 crore by issuing 305.9 million shares through a Qualified Institutional Placement (QIP) priced at ₹817 per share. Launched on 16 July 2025, this is India’s largest-ever QIP, reflecting strong institutional confidence and aiming to bolster SBI’s capital base.
- The QIP, initiated on 16 July 2025, represents SBI’s first equity capital raise in eight years, marking a major initiative to strengthen its Common Equity Tier‑1 (CET‑1) buffer and support future credit expansion. The issue was priced at ₹817, slightly below the market rate, to attract deeper investor participation.
- SBI offered 305.9 million new shares to institutional investors including foreign long-term funds, LIC, mutual funds and sovereign wealth funds. This comprehensive engagement led to oversubscription, with total bids reaching ₹1.10 lakh crore—over 4.5 times the quota.
- The capital raised elevated SBI’s CET‑1 ratio from 10.81% to approximately 11.5%, though still trailing the private sector average of ~14%. This positions SBI to support a planned ₹8 trillion (≈ $93 billion) loan growth, while preparing for future requirements under Basel III regulations.
Main Point :- (i) Life Insurance Corporation of India (LIC) emerged as a prominent anchor investor, acquiring shares worth ₹50,000 crore—boosting its stake from 9.21% to 9.49%. Other participants included BlackRock, Marshall Wace, HDFC Mutual, and Quant MF, demonstrating robust support from both domestic and global institutions.
(ii) SBI shortlisted six leading investment banks to manage the QIP: Citigroup, HSBC, Morgan Stanley, Kotak Investment Banking, ICICI Securities, and SBI Capital Markets. Legal advisors included Cyril Amarchand Mangaldas, Linklaters, Shearman & Sterling, and Allen & Overy.
(iii) Alongside the QIP, SBI's board has approved a ₹20,000 crore bond issuance in FY 2025–26 (Basel III-compliant Tier 1 & Tier 2), aiming for a total capital infusion of ₹45,000 crore. Estimates suggest the QIP will modestly reduce SBI’s Return on Equity (RoE) from ~17% to around 16%, aligning capital strength with sustainable growth strategy.
About State Bank of India
Chairman : Challa Sreenivasulu Setty
Headquarter : Mumbai
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