₹25K cr SBI QIP draws bids worth ₹1 trn; LIC, domestic MFs lead charge

LIC bids over Rs 5,000 crore in SBI's Rs 25,000 crore QIP, joined by major MFs and FPIs; fundraise to boost capital adequacy by 60 bps with 3.47% equity dilution

State Bank of India (SBI), the country’s largest lender, attracted bids worth nearly ₹1 trillion for its ₹25,000 crore ($2.9 billion) qualified institutional placement (QIP), with local institutions leading the charge, according to people in the know.

 

Sources said Life Insurance Corporation (LIC) of India placed bids worth over ₹5,000 crore, while domestic mutual funds (MFs), such as SBI MF, ICICI Prudential MF, Aditya Birla Sun Life MF, and HDFC Bank, bid for over ₹1,500 crore each. About half a dozen foreign portfolio investors (FPIs), including Singapore’s GIC and Capital International, also participated in the QIP.

 

These financial institutions couldn’t be reached for independent confirmations.

 

This is the first QIP by the banking major since 2017, when it had raked in ₹15,000 crore. The fundraise is subject to the Government of India’s approval, SBI informed the stock exchanges on Wednesday. 

 

SBI’s shares closed at ₹829, down 0.35 per cent from the previous close. Most bids for the 310 million share QIP came around ₹820 apiece, said sources. The price range for the QIP was between ₹806.75 and ₹831.7 per share. The lower end of the price band was at a 0.5 per cent discount to the floor price of ₹811.05 set by the Securities and Exchange Board of India (Sebi). 

 

“The fundraise provided large institutions an opportunity to pick up a substantial quantity of shares in SBI, whose prospects are closely linked to that of the economy. Buying a similar quantity from the open market couldn’t have been possible without distorting prices,” said an investment banker.

 

According to Bloomberg, the consensus 12-month target price for SBI is about ₹935, implying nearly 13 per cent upside from the current levels. About 40 brokerages have a ‘buy’ rating on the stock, one has a ‘sell’ rating, and nine have a ‘hold’ rating.

 

Analysts said the bank’s reasonable valuation and encouraging growth prospects were a draw for investors.

 

“The share sale saw diverse responses, with participation from mutual funds, insurers, and long-only FPIs. Investors will get allotment for 20-30 per cent of their application amount given the oversubscription,” said another banker.

 

The ₹25,000 crore fundraise will add over 60 basis points to its capital adequacy ratio, which was 14.25 per cent as on March 31, 2025, analysts said.

 

The QIP will lead to a 3.47 per cent dilution in the current equity base. The government at present holds 57.43 per cent in SBI.

 

Citibank, Morgan Stanley, HSBC Securities, ICICI Securities, Kotak Mahindra Bank, and SBI Caps are the investment banks that handled the share sale.