State Bank of India, India’s biggest lender by assets, has raised nearly Rs 15,000 crore from institutional investors, both domestic and foreign, through the QIP route with LIC bidding for about 50% of the offering, ET Now reported. The QIP closed on Tuesday morning and is believed to have received demand in excess of Rs 20,000 crore, the report added.
This sale of shares eclipsed the previous offering by SBI in January 2014 to become the biggest QIP in India. SBI will be offering 52.26 crore shares at a marginally discounted price of Rs 287 per share against today’s closing of Rs 287.35 per share.
This QIP is a part of the bank’s plans to boost capital adequacy in order to meet Basel III norms amid mounting NPAs. The bank has already shortlisted six merchant banks to manage the sale of its shares through the QIP route. The bank had received the approval from its board to raise up to Rs 15,000 crore from capital markets during the current fiscal year in March itself.
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SBI Chairman Arundhati Bhattacharya had told Reuters on Friday that the bank expects to complete the sale by the end of 2017. Bhattacharya had said that SBI would most likely opt for selling the shares via a QIP, a method under which a listed company can issue equity shares and some other securities to a select group of institutional buyers.
“It’s a good way of raising funds in the sense that you are then able to go with people who have always supported you as well as bring more investors into India. It’s a comfortable format to work with,” she added.
The bad loans of public sector banks have jumped by over Rs 1 lakh crore during the April-December period of 2016-17. The gross NPAs of PSU banks’ increased to Rs 6.06 lakh crore by December 31, 2016, the first nine months of the last fiscal year, from Rs 5.02 lakh crore during 2015-16.For private sector banks, gross NPAs rose to Rs 70,321 crore by December 31, 2016, from Rs 48,380 crore as on March 31, 2016. For private sector banks, gross NPAs rose to Rs 70,321 crore by December 31, 2016, from Rs 48,380 crore as on March 31, 2016.