SBI Approves QIP Issuance, Plans to Raise ₹200 Billion via Bonds in FY26

State Bank of India (SBI) has approved the opening of its qualified institutional placement (QIP) issuance to raise up to 200 billion rupees via bonds in FY26. The bank is also planning a share sale of approximately $2.9 billion as soon as next week. SBI will consider fund raising on July 16.

State Bank of India (SBI) has taken significant steps to bolster its financial position by approving a bond issuance and a share sale in the upcoming fiscal year. The bank has received approval from its board to raise up to Rs 20,000 crore through bonds, with a share sale of approximately Rs 25,000 crore planned for FY26. The QIP issuance is expected to commence soon, with the bond sale scheduled for July 16.

The bond issuance, which aims to strengthen SBI's capital base, will be compliant with Basel III regulations and will be issued in Indian rupees to domestic investors. The share sale, on the other hand, will be conducted through Qualified Institutional Placement (QIP), Follow-On Public Offer (FPO), or other permissible methods. This equity fundraising will help SBI improve its Common Equity Tier 1 (CET1) capital ratio, a critical measure of the bank's financial health.

The bond sale is anticipated to attract significant interest from domestic investors, with Life Insurance Corporation of India and mutual funds expected to be among the anchor investors. The share sale, which will dilute the government's stake from 57.43% as of March 31, 2025, is being managed by six prominent investment banks, including ICICI Securities, Kotak Investment Banking, Morgan Stanley, SBI Capital Markets, Citigroup, and HSBC Holdings.

Following the approval of the bond issuance, SBI's shares rallied by 2% on July 16, demonstrating investor confidence in the bank's capital-raising efforts. The stock reached a day's high of Rs 833.90, edging closer to its 52-week high of Rs 898.80. This move comes after a steady upward trend in SBI's stock performance, with gains of 1% in July following increases of 1% in June, 3% in May, 2.22% in April, and a significant 12% jump in March.

References:
[1] https://www.ndtvprofit.com/business/sbi-may-issue-rs-25000-crore-qip-at-2-3-discount-to-market-price
[2] https://www.livemint.com/market/stock-market-news/sbi-board-approves-raising-rs-20-000-crore-via-bonds-shares-rally-2-11752654115274.html