SBI may launch Rs 25,000 crore QIP with up to 3% discount to current price

India’s largest Public Sector Bank, the State Bank of India (SBI), is likely to launch its Rs 25,000 crore Qualified Institutional Placement (QIP) very soon, according to multiple reports.

The pricing of this Qualified Institutional Placement is expected to be close to the current market price, with a possible discount of up to 2–3 per cent. At present, the SBI’s shares are trading at Rs 827.80 on the National Stock Exchange, up by Rs 11.35 or 1.39 per cent.

If the bank goes ahead with the expected discount, the Qualified Institutional Placement issue price could be slightly lower than this level. The Life Insurance Corporation of India is likely to be the biggest anchor investor in this Qualified Institutional Placement.

Along with the Life Insurance Corporation, several domestic mutual funds are also expected to participate in the offer. This Qualified Institutional Placement will help the SBI strengthen its capital base, support its growing loan book, and meet regulatory capital requirements.

The SBI had last issued a Qualified Institutional Placement in June 2017, when it raised Rs 15,000 crore at a 1 per cent discount, pricing the issue at Rs 287.25 per share.

This time, the bank is expected to raise a much larger amount, making it the biggest Qualified Institutional Placement ever in the Indian market. Leading financial institutions such as Citigroup, HSBC, ICICI Securities, Kotak Investment Banking, Morgan Stanley and SBI Capital Markets are managing the issue.

In the last five days, the shares of the public lender have delivered a return of Rs 14.90, or 1.83 per cent, to its investors. They have surged by Rs 35, or 4.42 per cent, in the past one month. The shares have risen by Rs 61.35, or 8.01 per cent, in the last six months. On a year-to-date basis, the shares have gained Rs 34.45, or 4.36 per cent, as per official data.