State Bank of India (SBI), the country's largest lender, has successfully raised ₹25,000 crore through a qualified institutional placement (QIP) of its equity shares. This marks the largest QIP executed in the Indian capital markets. The bank's board approved the issue and allotment of 30.6 crore shares at an issue price of ₹817 each.

Details of the QIP

The QIP was launched on July 16, 2025, with a floor price of ₹811.05 per equity share, a 2.3% discount to the previous day's closing price on the NSE. SBI had the option to offer a discount of up to 5% on the floor price. The issue closed on July 21, 2025, following the receipt of application forms and funds from eligible Qualified Institutional Buyers (QIBs).

The QIP witnessed significant demand, being oversubscribed 4.5 times. The offering attracted bids worth ₹1.10 lakh crore from nearly 120 institutional investors. Foreign investors made 64.3% of the bids. Approximately 88% of the final allocation was given to marquee long-term investors, with foreign long-term investors receiving 24% of the issue size.

Objective of the QIP

SBI aims to utilize the proceeds from the QIP to strengthen its capital base and augment its Common Equity Tier-I (CET-1) capital buffer. The bank's CET-1 capital is expected to improve to 11.50% from 10.81% as of March 31, 2025. The fundraise will support credit growth across retail, MSME, and corporate segments. The QIP is part of SBI's larger plan to raise ₹45,000 crore in FY26 through debt and equity markets. In addition to the QIP, SBI's board has approved raising ₹20,000 crore through Basel III-compliant Additional Tier 1 and Tier 2 bonds.

SBI is targeting a Common Equity Tier 1 (CET1) ratio of 12% and a Capital to Risk-weighted Assets Ratio (CRAR) of 15% by March 2027. As of March 2025, SBI's CET1 ratio stood at 10.81%, and its CRAR was 14.25%.

Key Investors

Life Insurance Corporation (LIC) of India participated in SBI's QIP, acquiring 6.1 crore shares for ₹5,000 crore. Following the issue, LIC's shareholding in SBI will increase from 9.21% to 9.49% of the bank's paid-up capital. Other major investors included domestic mutual funds like HDFC Life and ICICI Prudential Life, and foreign investors such as BlackRock Group, Marshall Wace, Nomura, and Millennium.

Impact of the QIP

The QIP is expected to have several positive impacts on SBI:

• Strengthened Capital Structure: The ₹25,000 crore capital infusion will bolster SBI's capital adequacy and improve its CET-1 ratio by approximately 60 basis points.
• Reduced Government Stake: The QIP will result in a slight decrease in the government's ownership of SBI, from 57.43% to around 55%.
• Increased Financial Flexibility: The additional capital will provide SBI with greater financial flexibility to meet future regulatory requirements and pursue growth opportunities.
• Positive Market Sentiment: The successful completion of the QIP, with strong participation from both domestic and foreign investors, reflects confidence in SBI's fundamentals and long-term prospects.

SBI Stock Performance

Following the fundraising announcement and ahead of the QIP launch, SBI's share price closed higher. On July 16, 2025, the scrip settled at ₹830.50 on the NSE, up 1.72% over the last close, and at ₹831.55 on the BSE, up 1.81%. On July 18, 2025, SBI share price opened at ₹832.00 on NSE, above the previous close of ₹829.00. The stock is trading at ₹822.70 as of 9:16 AM, a moderate decline of 0.76%.

SBI's last QIP was in FY18, when it raised ₹18,000 crore. The bank has appointed Citigroup, HSBC, ICICI Securities, Kotak, Morgan Stanley, and SBI Capital to manage the QIP transaction.