SBI raises 15,000cr via stake sale to institutions

India’s largest state lender State Bank of India (SBI) on Friday announced the successful completion of its qualified institutional placement (QIP) worth `15,000 crore, the largest ever fund raising through this route with active participation from both domestic as well as global investors.

The proceeds of the issue would be used for shoring up its capital adequacy ratio and for general corporate purposes. With this share sale, the governments holding in the bank has come down to 57.07 per cent.

Addressing the media, SBI chairperson Arundhati Bhattacharya said that the bank’s key capital ratios would increase by 79 basis points with its capitalto-risk weighted assets ratio expected to climb to 13.64 per cent and common equity Tier 1 likely to rise to 10.2 per cent.

With the bank planning to raise additional funds through a stake sale in its insurance subsidiary, the SBI chief said the bank would not need to tap the capital market again in this financial year.

“The overwhelming response to the QIP from a diverse cross section of investors highlights the faith reposed in SBI by both domestic and foreign institutional investors. The QIP allocation further enhances the diversity of the shareholder base which will add value to the bank,” SBI said.

The issue was oversubscribed with demand exceeding `27,000 crore. While long-term FPIs subscribed 26 per cent of the issue, hedge funds accounted for 11 per cent. The remaining portion got subscribed by domestic investors with the share of state owned LIC being 38 per cent.

The bank issued approximately 52.5 crore shares at the upper end of the price band of `287.25 per share.