SBI QIP largest at Rs 15,000 cr; top 10 in last 10 years add up to Rs 60,000 cr

State Bank of India (SBI) is understood to have received bids worth around Rs 22,000 crore in response to the placement of shares for around Rs 15,000 crore at a floor price of Rs 287.58 apiece. “The response has been very good and most of the bids came in at the top end of the price range,” said an investment banker. Investment bankers said among those who participated were Fidelity, Blackrock, Temasek, Capital, Wellington and Life Insurance Corporation. SBI will finalise the pricing later this week and will offer a discount of anywhere between 0% and 4% to the closing price on Monday. The bank is expected to offer as many as 544 million shares. In January 2014, SBI had raised Rs 8,032 crore via a placement of shares. At the time, Life Insurance Corporation of India (LIC) had picked up a big chunk – around 41% – of the total shares sold. The shares were priced at `151.76 per share and the bank had been hoping to raise Rs 9,600 crore. The SBI stock closed at `287.35 on Monday, ahead of the announcement. At this price, the stock – including subsidiaries – trades at 1.1 times price to adjusted book for 2017-18. On a stand-alone basis, the stock trades at 1.3 times.

SBI shares had hit a 52-week high of Rs 315 in May this year after touching a 52-week low of Rs 197.1 in June 2016.

The merger of SBI and its five associate banks has resulted in a consolidated balance sheet of Rs 35 lakh crore, making it one of the top 50 banks in the world. At the end of March 2017, the size of SBI’s stand-alone balance sheet was Rs 27 lakh crore. On a standalone basis, SBI’s FY17 net profit rose 5.36% to Rs 10,484 crore but net profit (after minority interest) of the SBI Group declined to Rs 241 crore in FY17, from Rs 12,225 crore in the previous year. As at the end of the March quarter of FY17, SBI’s total capital adequacy ratio stood at 13.11%, of which tier-I capital adequacy ratio was 10.35%

Earlier last month, private sector lender Kotak Mahindra Bank had raised Rs 5,803 crore through a QIP selling 6.2 crore shares at Rs 936 crore per share. At an event in March, SBI chairman Arundhati Bhattacharya had observed that during the earlier QIP, the merchant bankers had been optimistic initially. However, on the night before the issue was to close, she had been informed the book was about to fall-off. “Early morning I got on to the phone and spoke to people. Somehow by the evening we had managed to stitch together at least 80% subscription and closed the issue,” Bhattacharya had said.