The State Bank of India (SBI) has set its stage for a historic qualified institutional placement (QIP) worth Rs 25,000-crore and it has seen very strong investor interest so far as it was subscribed three-times its offer size in less than a day.
SBI QIP Worth Rs 25,000
The PSU lender had launched the QIP in the second half of July 16 at a floor price of Rs 811.05 apiece, at a slight discount of the last traded price.
These funds are supposed to help the public sector lender’s loan growth and strengthen the balance sheet further. This is also the first time ever since 2017 that SBI has tapped into the equity market to raise funds.
The QIP has received bids for Rs 75,000 crore worth of shares as against its offer size of Rs 25,000 crore.
The anchor investor for the QIP is the Life Insurance Corporation of India (LIC) and it led the race among domestic fund houses by bidding for shares worth Rs 7,000 crore.
Quant Mutual Fund has followed, by bidding for shares worth Rs 3,000 crore. HDFC Pension Fund, ICICI Prudential Mutual Fund, Motilal Oswal Mutual Fund and Birla Mutual Fund also participated strongly.
Among foreign institutional investors (FIIs), Nomura has bid for shares worth Rs 1,800 crore while Marshall Wace and Millennium bid for Rs 1,500 crore shares each.
What Does This Mean For Investors?
This is part of SBI’s broader plans to support loan growth, strengthen its balance sheet and meet regulatory requirements.
The PSU bank has also shortlisted six investment banks to manage the transaction, including the Indian arms of Citigroup Inc. and HSBC Holdings Plc, as well as ICICI Securities Ltd., Kotak Investment Banking, Morgan Stanley, and SBI Capital Markets Ltd., Bloomberg said in a report.
