SBI Launches Rs 25,000 Crore QIP To Boost Capital Base; Key Points To Know
Among expected bidders are state-run Life Insurance Corporation of India (LIC), large domestic mutual funds, financial institutions, and international investors. LIC, which holds a 9.3% stake in SBI as of March 31, had picked up nearly 40% of the 2017 QIP.
The central government, SBI's majority shareholder, owns 56.9% of the bank, as per its latest annual report. Analysts estimate the government's holding could fall to around 55% post-issue.
Strengthening Capital Buffers, Not Just for Growth
The QIP is aimed at bolstering SBI's common equity tier I (CET-1) capital ratio by around 60 basis points. SBI Chairman C.S. Setty previously said that the bank's existing capital could support additional credit growth of nearly Rs 8 lakh crore, and that the QIP is meant to strengthen the capital base, not fund immediate growth.
As of March-end, SBI's CET-1 ratio stood at 10.81%, above the regulatory minimum, while its overall capital adequacy ratio (CAR) was 14.25%. However, this is still lower compared to some private sector peers.
QIP Lead Managers and Additional Bond Raise
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