SBI Taps Six Global Investment Banks for Landmark ₹25,000 Crore QIP

Thursday, June 26: State Bank of India (SBI), India’s largest public sector lender, has appointed six prominent investment banks to manage its proposed Qualified Institutional Placement (QIP) of up to ₹25,000 crore. This strategic move marks SBI’s first equity fundraising in eight years and is poised to be the largest QIP-based share sale in India’s history, if successfully executed.

Lead Managers Finalised for the Fundraising

The appointed book-running lead managers (BRLMs) for the QIP include:

• HSBC
• Citi
• Kotak
• Morgan Stanley
• ICICI Securities
• SBI Capital Markets

SBI’s board of directors approved the QIP proposal on May 3, 2025, and this approval remains valid for a period of 12 months. Sources suggest that these investment banks have agreed to charge a nominal fee of ₹1 for this high-profile transaction, a common practice for large, prestigious deals that offer significant league table recognition.

Fundraising Objective and Capital Strengthening Plan

The primary objective of this substantial capital infusion is to fortify the bank’s capital base, rather than to support immediate growth initiatives. This proactive measure is designed to enhance SBI’s resilience and prepare it for future business expansion and compliance with evolving regulatory norms, such as Basel III.

SBI’s Capital Targets by March 2027:

• Common Equity Tier 1 (CET1) Ratio:
  • Target by March 2027: 12%
  • Actual as of March 2025: 10.81%
• Capital to Risk-weighted Assets Ratio (CRAR):
  • Target by March 2027: 15%
  • Actual as of March 2025: 14.25%

Market-Linked Timing and Historical Content

The actual timing and final quantum of the QIP will be contingent on prevailing market conditions and investor appetite. This will be SBI’s first equity offering since June 2017, when it successfully raised ₹15,000 crore by selling 522 million shares through a QIP. Historically, Life Insurance Corporation (LIC), a significant shareholder in SBI (holding 9.38% as of March 31, 2025, after the central government’s 57.43% stake), has often subscribed to a substantial portion of SBI’s equity offerings, and is expected to do so again.

SBI’s Strong Financial Performance

SBI has demonstrated strong financial performance, reporting a record net profit of ₹70,901 crore for the full financial year FY25, a robust 16.08% year-on-year growth. Despite a 10% dip in Q4 FY25 standalone net profit to ₹18,643 crore due to higher provisions, the bank’s asset quality has consistently improved, with the Gross Non-Performing Assets (GNPA) ratio declining to 1.82% as of March 31, 2025. This strong performance, coupled with the government’s backing and the bank’s global reach, is expected to garner strong investor confidence for the upcoming QIP.

Current Share Price 

As of 12:25 PM today, SBI’s shares were down 0.72% or ₹5.80 and were trading at ₹794.25. It remains to be seen at what price the shares close at the end of today’s market session.

What’s Ahead For SBI?

SBI’s focus now shifts to gauging market sentiment and timing the ₹25,000 crore QIP for maximum investor participation. Analysts expect strong institutional interest given the bank’s improving asset quality, robust profitability, and strategic capital strengthening plan. Execution clarity, pricing strategy, and LIC’s potential participation will be closely watched in the coming weeks.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations