Moody's Ratings has affirmed State Bank of India 's (SBI) Baa3 long-term deposit ratings while upgrading the bank's Baseline Credit Assessment (BCA) and Adjusted BCA to baa3 from ba1. This upgrade reflects the bank's improved financial health and strategic positioning in the Indian banking sector.

Upgraded Credit Assessment

The rating agency's decision to upgrade SBI's BCA is driven by expectations of improved capitalization over the next 12-18 months. This improvement is anticipated to come from both internal capital generation and potential external capital raising efforts. The upgrade brings SBI's standalone credit profile in line with other similarly rated peers.

Key Financial Metrics

SBI's financial performance has shown notable improvements:

Growth and Asset Quality

SBI expects a 12% loan growth for the fiscal year 2026, aligning with the industry average. The bank's asset quality is expected to remain stable, with its corporate lending book skewed towards highly rated borrowers and its retail book having a large share of secured products like mortgages and auto loans.

Capital Raising Initiative

In a significant move to bolster its capital position, SBI has successfully raised ₹24,999.99 crore through a Qualified Institutions Placement (QIP). The bank issued 30,59,97,552 equity shares at ₹817 per share, including a premium of ₹816 per share. This capital infusion is expected to further strengthen SBI's balance sheet and support its growth plans.

Governance and Outlook

Moody's has revised SBI's Governance Issuer Profile Score to G-2 from G-3, citing the resilience of the bank's asset quality and improving capitalization as indicators of a more prudent financial strategy. The outlook on SBI's ratings remains stable.

Government Support

The rating agency continues to factor in a very high probability of government support for SBI, considering its status as the largest bank in India and its close relationship with the government, which held a 56.9% stake in the bank as of March 2025.

State Bank of India's upgraded credit assessment and successful capital raise underscore its strong position in the Indian banking sector and its improved financial health. The bank's focus on asset quality and capitalization is likely to support its growth trajectory in the coming fiscal year.

State Bank of India (SBI), the country's largest lender, has successfully concluded its qualified institutional placement (QIP), raising over Rs 25,000 crore from institutional investors. This fundraising effort marks the largest QIP in Indian market history, showcasing strong investor confidence in the bank's growth prospects.

QIP Details

The bank allocated approximately 30.6 crore equity shares at Rs 817.00 per share, including a premium of Rs 816.00 over the face value of Re 1.00. The QIP, which opened last Wednesday, closed on Monday after achieving full subscription with robust participation from qualified institutional buyers (QIBs).

Capital Augmentation Strategy

This significant capital raise is part of SBI's strategy to bolster its financial position and support its growth plans. It's worth noting that this is not the first time SBI has tapped into the QIP route for fundraising. Previously, the bank had raised Rs 15,000 crore through a QIP in June 2021.

Official Confirmation

According to the LODR (Listing Obligations and Disclosure Requirements) data, SBI's Committee of Directors met on July 21 to approve the closure of the Issue. The committee confirmed the allocation of 30,59,97,552 equity shares at an issue price of Rs 817.00 per equity share, aligning with the details provided in the news update.

Key Highlights of the QIP

Market Impact

The successful completion of this record-breaking QIP underscores the strong market position of SBI and the confidence it commands among institutional investors. This substantial capital infusion is expected to strengthen SBI's balance sheet and potentially fuel its expansion and lending activities in the coming years.

Conclusion

As SBI concludes this landmark capital raise, market observers will be keenly watching how the bank deploys these funds to drive growth and maintain its leadership position in India's banking sector. The successful QIP also reflects the overall positive sentiment towards India's financial services sector among institutional investors.