State Bank of India (SBI) is expected to launch a qualified institutional placement (QIP) worth Rs 25,000 crore today on July 16, as per a report by CNBC Awaaz. If it goes through, this would be one of the largest equity funds raised by a public sector lender. The QIP was scheduled to launch this month, but the dates were not confirmed.
LIC may be anchor investor
According to CNBC-Awaaz, Life Insurance Corporation of India (LIC) is likely to participate as the anchor investor in the QIP, with a potential bid of around Rs 7,000 crore.
Likely pricing between Rs 790-800
The QIP is expected to be priced in the range of Rs 790 to Rs 800 per share, said CNBC-Awaaz citing sources. The final pricing will depend on investor appetite and overall market conditions. The QIP aims to strengthen SBI’s capital adequacy ratio in line with regulatory requirements. It will also support the bank’s future growth by boosting its lending capacity.
SBI yet to respond
SBI has not yet issued an official comment on the matter and hasn’t yet commented on the report by CNBC-Awaaz. The bank had earlier received shareholder approval to raise equity capital through QIP or other modes.
The QIP, if launched successfully, would help SBI, a PSU bank, strengthen its capital base and support credit growth amid India’s economic expansion. It’s the first time since 2017 that the lender, majority owned by the government, tapped the equity market.