State Bank of India has raised Rs 8,032 crore by selling shares through Qualified Institutions Placement (QIP) issue. It has issued 51,320,436 (5.13 crore) equity shares of face value Rs 10 at Rs 1,565 per equity share.

The issue will increase the overall capital adequacy ratio of the bank to 12.81 per cent and Tier I capital adequacy ratio to over 9.67 per cent (based on risk weighted assets as on September 30, 2013).

The QIP will result in dilution of Government of India stake to 58.6 per cent post transaction.

The gross issue size, upon final allotment of equity shares will be Rs 8,032 crore, the bank had said in a statement on Thursday. The fund-raising is claimed to be the largest QIP equity issuance till date in India.

The country's largest public sector bank had originally estimated to raise Rs 9,500 crore but failed to reach the target due to muted demand from foreign investors ahead of the US Fed’s tapering announcement.

According to reports, domestic investor Life Insurance Corporation of India (LIC) picked up about Rs 3,000 crore worth of shares as part of the issue.

Earlier on January 2, 2014 the Government of India infused Rs 2,000 crore into the bank through a preferential allotment.

Arundhati Bhattacharya, Chairman of SBI, said: “The QIP saw participation from a wide range of domestic and international investors. That the offering successfully withstood a challenging global and emerging market backdrop underlines the strength of SBI and investor confidence in its equity story.”

She further said, “After the conclusion of the QIP offering, the bank will meet its target of capital raising for the current year. The fresh inflow will substantially augment our capital adequacy ratio.”

(This article was published on January 31, 2014)
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