Last Updated:June 26, 2025, 07:39 IST
The State Bank of India (SBI) has shortlisted five investment banks to manage its proposed qualified institutional placement
SBI QIP
State Bank Of India: The State Bank of India (SBI) has shortlisted five investment banks—Kotak Mahindra Capital Co., Citigroup Capital Markets, HSBC, Morgan Stanley, and ICICI Securities—to manage its proposed qualified institutional placement (QIP) worth Rs 25,000 crore, Mint reported, citing two people familiar with the development.
“More than a dozen banks made presentations, and five of them have been selected to work alongside SBI Capital Markets, the investment banking arm of the SBI group,” one of the sources told Mint on condition of anonymity.
According to the report, the selected banks have pitched to handle the fundraising for a nominal fee of just Re 1. This unusual pricing approach, while rare today, was relatively common during the 2000s when investment banks often offered steep discounts to secure mandates for high-profile deals and improve their league table rankings.
As of now, SBI, HSBC, Kotak, ICICI Securities, Morgan Stanley, and Citigroup have not responded to queries regarding the development.
Earlier this week, SBI invited proposals from investment banks for the QIP. A QIP is a relatively faster route for listed companies to raise equity capital by issuing shares or convertible securities to institutional buyers, without the need for elaborate procedures associated with rights issues or public offers.
On 3 May, SBI’s board had approved the plan to raise up to Rs 25,000 crore in equity capital. The approval is valid for one year.
Market Activity Picks Up in May
The capital markets, which remained subdued in the initial months of FY25, witnessed a notable pickup in activity starting May. As per data cited by Mint, the BSE saw 28 bulk and block deals in May, up from just 7 in April. In the broader NSE 500 segment, 274 such deals were recorded in May compared to 128 in April, according to Trendlyne data.
SBI last tapped the QIP route in FY18, when it raised Rs 15,000 crore. Although reports in FY20 had suggested that the bank was considering another QIP in the range of Rs 15,000–18,000 crore, the plan was eventually shelved.
Capital Buffers Lag Peers
As of 31 March 2025, SBI’s capital adequacy ratio stood at 14.25%, slightly down from the previous year but still 122 basis points higher than its December-end level. Despite exceeding the regulatory minimum of 12.1%, SBI trails behind some of its peers. For instance, HDFC Bank reported a capital adequacy ratio of 19.6%, while Bank of Baroda stood at 17.19%.
Market Share and Financial Performance
SBI continues to maintain a dominant market position, with a 22.6% share in domestic deposits and 19.72% in loans, as per Reserve Bank of India data cited by the bank. However, the lender reported a 10% decline in net profit to Rs 18,643 crore for the March quarter, primarily due to higher provisions.
On Wednesday, shares of SBI closed at Rs 800 on the NSE, up 0.58% from the previous session. The benchmark Nifty 50 index rose 0.8% on the same day. With a market capitalisation of Rs 7.13 trillion, SBI remains the most valuable public-sector bank in India.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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