SBI may launch INR 25,000 crore QIP with up to 3 pc discount to current price

NEW DELHI – India’s largest Public Sector Bank, the State Bank of India (SBI), is likely to launch its INR 25,000 crore Qualified Institutional Placement (QIP) very soon, according to multiple reports.

The pricing of this Qualified Institutional Placement is expected to be close to the current market price, with a possible discount of up to 2–3 per cent.

At present, the SBI's shares are trading at INR 827.80 on the National Stock Exchange, up by INR s 11.35 or 1.39 per cent.

If the bank goes ahead with the expected discount, the Qualified Institutional Placement issue price could be slightly lower than this level.

The Life Insurance Corporation of India is likely to be the biggest anchor investor in this Qualified Institutional Placement.

Along with the Life Insurance Corporation, several domestic mutual funds are also expected to participate in the offer.

This Qualified Institutional Placement will help the SBI strengthen its capital base, support its growing loan book, and meet regulatory capital requirements.

The SBI had last issued a Qualified Institutional Placement in June 2017, when it raised INR 15,000 crore at a 1 per cent discount, pricing the issue at INR 287.25 per share.

This time, the bank is expected to raise a much larger amount, making it the biggest Qualified Institutional Placement ever in the Indian market.

Leading financial institutions such as Citigroup, HSBC, ICICI Securities, Kotak Investment Banking, Morgan Stanley and SBI Capital Markets are managing the issue.

In the last five days, the shares of the public lender have delivered a return of INR 14.90, or 1.83 per cent, to its investors.

They have surged by INR 35, or 4.42 per cent, in the past one month. The shares have risen by INR 61.35, or 8.01 per cent, in the last six months.

On a year-to-date basis, the shares have gained INR 34.45, or 4.36 per cent, as per official data.