State Bank of India (SBI), India's largest public sector bank, has launched a substantial Rs 25,000 crore qualified institutional placement (QIP) to raise capital. This move is expected to add approximately 65 basis points to the bank's tier one capital, supporting its net interest margins (NIMs) and credit growth.

Capital Raise Details

The QIP comes with a floor price of Rs 811.05 per share, representing a 2.50% discount to the previous close. The indicative offer price range is set between Rs 806.75 to Rs 831.70 per share. Bidding for this share sale is scheduled to continue until early Thursday.

Financial Projections

SBI anticipates that this capital infusion will support its financial performance:

• Full-year NIMs are projected to be around 2.90%.
• Credit growth is forecasted at 12-13% for the year.
• The bank's retail business shows strong performance, with a 49% year-over-year growth in segmental profitability.

Additional Insights from LODR Data

According to the latest LODR filing, SBI's Committee of Directors has provided further details on the QIP:

1. The Issue opened on July 16, 2025.
2. The Floor Price for the Issue has been set at Rs 811.05 per Equity Share, based on the pricing formula prescribed under SEBI ICDR Regulations.
3. The bank may offer a discount of up to 5.00% on the floor price, as approved by shareholders.
4. The final Issue price will be determined by SBI in consultation with the appointed Book Running Lead Managers.

Additional Fund Raising Plans

In addition to the QIP, SBI has announced plans to raise Rs 20,000 crore through Basel III-compliant bonds. This initiative aims to raise funds from domestic investors during the fiscal year 2026, subject to government approval where required. The bank's Central Board has approved raising funds through the issuance of Basel III compliant Additional Tier 1 and Tier 2 Bonds.

Interest Rate Reduction on Fixed Deposits

SBI has reduced interest rates by 15 basis points on fixed deposits for tenures between 46 days to less than 1 year, effective July 15. The new rates for general depositors range from 4.90% to 5.90%, while senior citizens' rates range from 5.40% to 6.40%. The special 'Amrit Vrishti' scheme (444 days) now offers 6.60%, down from 6.85%.

Market Impact

This substantial capital raise is expected to have significant implications for SBI's financial structure and market position. As the largest public sector bank in India, SBI's moves are closely watched by investors and market analysts alike.

The success of this QIP could set a precedent for other banks and financial institutions looking to strengthen their capital base in the current economic climate. Investors and market watchers will be keenly observing the outcome of this share sale, which could influence market sentiment and future capital-raising activities in the banking sector.

As the bidding process continues, all eyes will be on SBI to see how this massive capital infusion will translate into the bank's operational strategies and growth plans in the coming months.

State Bank of India (SBI), India's largest public sector bank, has announced significant capital raising initiatives, setting the stage for a substantial influx of funds.

QIP Floor Price Set

SBI has set the floor price for its Qualified Institutional Placement (QIP) at ₹811.05 per share. This price, determined based on the pricing formula prescribed under the Securities and Exchange Board of India (SEBI) regulations, marks the minimum price at which the bank can issue shares to qualified institutional buyers.

Key details of the QIP include:

• The 'Relevant Date' for the QIP is July 16, 2025
• SBI may offer a discount of up to 5% on the floor price, as approved by shareholders
• The final issue price will be determined in consultation with the appointed Book Running Lead Managers

Additional Bond Issuance Approved

In a separate development, SBI's Central Board has approved another significant fund-raising initiative. The bank plans to raise funds through the issuance of Basel III compliant bonds:

This issuance is subject to Government of India approval where required.

Regulatory Compliance

SBI has emphasized its commitment to regulatory compliance throughout these processes:

• The bank's trading window for securities remains closed for all 'Designated Persons' as per its Prevention of Insider Trading Code of Conduct
• All necessary disclosures have been made to the BSE Limited and National Stock Exchange of India Limited

These capital raising initiatives underscore SBI's proactive approach to strengthening its capital base and supporting future growth. The successful execution of these plans could significantly bolster the bank's financial position and its ability to meet evolving regulatory requirements.