State Bank of India Raises ₹25,000 Crore via Record-Breaking QIP; LIC Boosts Stake

India’s largest lender, State Bank of India (SBI), has successfully raised ₹25,000 crore (about $2.9 billion) through a Qualified Institutional Placement (QIP), marking the biggest QIP in Indian banking history. The sale involved issuing approximately 306 million shares at an issue price of ₹817 per share — a slight discount relative to market levels.

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Capital Raise and Market Response

This QIP was introduced on July 16, 2025, and its floor price of ₹811.05 represents a slight 2–5% reduction from the current share price of about ₹830–842. This is SBI's first QIP capital-raising initiative since 2017. SBI's stock increased more than 1% after the announcement, closing close to ₹842.30, demonstrating strong market confidence.

Investor Appetite and Oversubscription

Demand for this offering was vigorous. Within just a day of its launch, the QIP was oversubscribed nearly three to four times — receiving bids worth ₹75,000–1,10,000 crore compared to the ₹25,000 crore on offer. Over 120 institutions participated, including key global players like BlackRock, Marshall Wace, and Millennium. Domestic funds and mutual funds — LIC, Quant Mutual, HDFC Pension, ICICI Prudential, Motilal Oswal, and Birla — also subscribed heavily.

LIC’s Strategic Investment and Stake Increase

The state-owned Life Insurance Corporation of India (LIC) emerged as a major anchor investor, acquiring ₹5,000–7,000 crore worth of shares at ₹817 apiece. As a result, LIC’s stake in SBI has increased from 9.21% to 9.49%.

A Broader ₹45,000 Crore Capital Strategy

This QIP is part of SBI’s larger capital-formation plan for fiscal 2025–26. The bank aims to raise a total of ₹45,000 crore— ₹25,000 crore via QIP and an additional ₹20,000 crore through issuance of Basel III-compliant bonds, including AT1 and Tier-II instruments. The board had approved this comprehensive plan in May, with shareholder backing following in June.

Purpose and Impact

The capital boost aims to strengthen SBI’s Common Equity Tier 1 (CET1) ratio, improve capital adequacy, and support accelerated loan growth. As of March 2025, SBI’s CET1 ratio stood at 10.81%, below the target of 12% by March 2027. The QIP alone is expected to increase CET1 by roughly 60 basis points. The additional bond funding will further fortify the bank’s Tier-I and overall capital adequacy. SBI’s leadership emphasises this is a preemptive move — the bank does not immediately need fresh capital but is taking advantage of favourable market conditions.

Market Implications and Strategic Outlook

This landmark QIP sets a new record, surpassing Coal India’s previous QIP of ₹22,560 crore in 2015. The enthusiastic participation from domestic and international investors signals strong confidence in SBI’s growth trajectory. By strengthening its capital base, SBI is positioning itself to manage asset quality, expand its lending portfolio, and comply with regulatory requirements while seizing growth opportunities in the evolving banking sector.

Conclusion

Along with its larger ₹45,000 crore capital-raising plan, SBI's historic ₹25,000 crore QIP represents a turning point for the bank. The effort, which is well-received by institutional investors, especially LIC, and is oversubscribed, greatly improves SBI's capital ratios. The bank is ready to support future lending growth, regulatory compliance, and strategic development as it strengthens its financial base