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State Bank of India Invites Pitches for ₹25,000 Crore QIP

Strategic Insights

— 1 min read

The State Bank of India (SBI) has invited investment banks to help it raise ₹25,000 crore through a qualified institutional placement (QIP), its second such fund-raising exercise since fiscal year 2018. The board of India's largest bank had approved the fund-raising on May 3, and the investment banks will make their presentations this week. This move is significant as it comes after SBI's chairman, C.S. Setty, stated that the bank has no immediate need for growth capital, despite having a capital adequacy ratio of 14.2%. However, the bank wants to take advantage of the depth of the capital markets to raise money.

Key Takeaways:

  • SBI has invited investment banks to help it raise ₹25,000 crore through a QIP, its second such fund-raising exercise since FY18.
  • The board of SBI had approved the fund-raising on May 3, 2023.
  • The selected investment banks will make their presentations this week.
  • SBI has no immediate need for growth capital, according to chairman C.S. Setty.
  • Despite having a capital adequacy ratio of 14.2%, the bank wants to raise money to take advantage of the depth of the capital markets.
  • SBI's market capitalisation stood at ₹7.09 trillion, the highest among state-run companies.
  • Public sector banks including Indian Overseas Bank, Bank of Maharashtra, Central Bank of India, Punjab & Sind Bank, and Uco Bank are pursuing QIPs.
  • QIP fundraising across sectors hit an all-time high in 2024, with 99 issues raising ₹141,482 crore.

Statistics:

  • ₹25,000 crore: the amount SBI aims to raise through the QIP.
  • 14.2%: SBI's capital adequacy ratio.
  • 3 May 2023: the date when the SBI board approved the fund-raising.
  • ₹7.09 trillion: SBI's market capitalisation.
  • ₹141,482 crore: the total amount raised through QIPs across sectors in 2024.
  • 99: the number of QIP issues in 2024.

Sources:

  • "State Bank of India invites pitches for Rs 25,000 crore QIP", economictimes.com, June 23 .
  • "SBI's QIP at the right time, will help banks access capital at better rates: C S Setty", economictimes.com, May 4.
  • "Public sector banks to raise ₹100,000 cr through QIPs in FY24", economictimes.com, April 2.
  • "QIP fundraising hits all-time high in FY24", livemint.com, March 15.

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