SBI raises over Rs7,200 cr through QIP
30 Jan 2014
State Bank of India (SBI), the nation's largest lender, has raised between Rs7,200 crore and Rs7,300 crore in a mega share sale targeted to raise Rs9,600 crore.
SBI managed to raise the amount mainly with help from the Life Insurance Corporation of India, with the programme of qualified institutional placement (QIP) evinced little interest from foreign institutional investors (FIIs).
FIIs, including some of the top names, skipped the issue over difference on pricing and concerns over bad assets.
While the bank has set the floor price at an upper limit of Rs1,629.35 and a lower limit of Rs1,565, most of the bids were in the lower limit.
Investment banking sources said SBI received bids for over 75 per cent of the shares on offer, amounting to Rs7,200-7,300 crore, as the offer closed on Wednesday.
LIC and the treasuries of some public sector banks together invested Rs5,200-5,400 crore in the SBI qualified institutional placement (QIP) as deep-pocketed FIIs, including top global ones, kept away. According to bankers, FIIs invested only about Rs1,200 crore in the issue.
Sources said the proceeds will meet SBI's current capital requirements for the current fiscal and the next and that the bank has the option to raise the remaining in multiple tranches.
Post-QIP, the government's holding in the bank will go down to 58 per cent.
SBI Caps, Citi, Deustche, Bank of America Merrill Lynch, HSBC, JP Morgan, and UBS acted as merchant bankers to the issue.
