Against ₹25,000 crore of stock SBI offered in India’s biggest qualified institutional placement (QIP) to date, the most-valued government asset drew bids worth ₹1.10 lakh crore from about 120 interested parties. Market sources said aggressive bids came from both local and overseas funds as an SBI share sale – especially of this magnitude – is relatively rare.
“Demand was strong, especially because the SBI paper is not in the market very frequently,” said a person aware of the details. “Investors also bid aggressively because with the capital adequacy ratio (CAR) of SBI being very strong, it is unlikely that the bank may raise any equity soon.”
Agencies Aggressive Bidding
Foreign investors were led by the likes of BlackRock Group, the US-based Millennium Capital Partners and Marshall Wace LLP, said the sources cited above.
Among the domestic funds, Life Insurance Corp of India (LIC), HDFC Life, ICICI Prudential Life Insurance, Quant Mutual Fund and White Oak Capital along with HDFC and ICICI Prudential Mutual Funds had all placed bids, people familiar with the details said.
Individual investors participating in the QIP could not be immediately reached. SBI’s common equity tier I (CET-1) ratio was at 10.81% at the end of March 2025, higher than the minimum regulatory requirement of 8%, while overall capital adequacy ratio (CAR) was at 14.25%. The latest capital raise will enhance SBI’s CET 1 by around 60 basis points. One basis point is a hundredth of a percentage point.
Record Haul
“There were about 120 investors who have placed bids, and the amount collected could be the largest in a QIP sale,” said a second person aware of the details.
Some institutional investors aggressively bid for large amounts, such as ₹7000 crore, said the first person cited above. “Both domestic and foreign investors were there, but the bids were skewed slightly towards domestic investors in, maybe, a 60:40 ratio. There was no dominant bidder,” this person said.
Analysts said that oversubscription reflects investors’ comfort with SBI’s operating metrics, favorable loan and profitability growth outlook, and asset quality. Cheaper valuations compared with some of the larger private banks and significant opportunity to unlock value in subsidiaries, including a stake in National Stock Exchange, are also cited as the reason for a strong demand in the QIP.
‘Bullish Cycle’
“The excitement at the QIP is also a reflection of investors’ bullish outlook on the lending ecosystem for the coming years. Despite having a capital adequacy ratio above the regulatory requirement, the bank went for the fund-raising,” said Ashwini Shami, Chief Portfolio Manager, at OmniScience Capital. “It shows that it is preparing with enough growth ammunition and does not want to lose out on any opportunity. For new investors, this is a sweet deal, given that valuations are still cheaper.” LIC is the largest institutional shareholder of SBI, having a 9.40% stake in the bank and would like to retain its stake at the current level, according to people familiar with the details. The SBI board is likely to meet soon to finalise the allocation of the shares.
After the QIP, the government’s holding is expected to reduce to around 55%, from 57.43%. The indicative offer price is between ₹ 806.75 and ₹831.70 a share. The indicative price is an implied discount – up to 3% in this case – to the share’s closing price of ₹831.7 on the NSE on Wednesday. The QIP is the largest from India after Coal India’s ₹22,560-crore similar sale to select institutional investors in 2015.
The bank’s shares retreated 0.35% to ₹ 829 apiece Thursday.
