State Bank of India raises Rs15,000 cr in India's largest QIP
06 Jun 2017
State Bank of India (SBI), the country's largest lender, has raised Rs15,000 crore from domestic and foreign institutional investors through qualified institutional placement (QIP) of shares, in the largest private placement of shares in the Indian market.
The QIP, which closed this morning, is reported to have received offers in excess of Rs20,000 crore, with Life Insurance Corporation (LIC) of India alone bidding for about 50 per cent of the offer.
The QIP of Rs15,000 crore is being made at a floor price of Rs287.58 per share. The share sale was fully committed prior to the launch, according to reports.
In a statement to the stock exchanges, the bank said it ''may offer a discount of not more than 5 per cent in the floor price in terms of regulation 85 of the Securities and Exchange Board of India (Sebi) ICDR regulations''.
The floor price of the share sale was fixed at Rs287.58 apiece for a face value of Rs1 each.
The QIP will help NPA-laden SBI boost its capital base to more than 14.50 per cent from 13.11 per cent now and ensure that it does not need capital for the next two years, according to sources.
SBI has so far raised over Rs30,000 crore from government contributions and qualified institutional placement of shares over the last three years.
SBI had announced plans to raise funds through a follow-on public offer and institutional placement in the current fiscal and sought applications from merchant bankers to manage the issue.
Last year, SBI had received Rs7,575 crore from the government as part of the centre's capital infusion plan. As on 31 March this year, the government owned 62.22 per cent of the bank.
The planned fund-raising follows the merger of five associate banks and Bharatiya Mahila Bank in April.
In January 2014, SBI had raised Rs8,032 crore through a share sale that fell short of the Rs9,600-crore target. Life Insurance Corporation had picked up nearly half the shares on sale.
Government, which owns majority stake in public sector lenders have been reluctant to infuse more capital as the banks continued to fail to meet performance targets.
The government had planned to invest Rs70,000 crore in public sector banks through fiscal 2019 to restore their health.
Shares of State Bank of India were higher by around 2 per cent intraday today as investors cheered the lender's plan to raise funds.