₹25,000 cr QIP shows investor confidence, to boost credit growth: SBI chief

Business Standard

23-07-2025

Speaking at a ceremony at the NSE to mark the the fund raise as India's biggest share sale ever, Setty said the capital will be deployed for asset growth
Press Trust of India Mumbai
SBI chairman C S Setty on Wednesday said the ₹25,000-crore capital raise through the qualified institutional placement (QIP) route is a vote of confidence on the country's largest lender and also the Indian economy.
Speaking at a ceremony at the NSE to mark the the fund raise as India's biggest share sale ever, Setty said the capital will be deployed for asset growth.
He also said that even before the QIP, the bank was in a position to support asset growth of up to ₹6 lakh crore, but the fund raise will be of help for it.
"This landmark equity issue is a vote of confidence in SBI's strong fundamentals, potential risk management and the customer centricity with the digital first approach," Setty said.
Thanking the investors led by state-run life insurance behemoth LIC for the response to the issue, which received bids of over ₹1.12 lakh crore and was over-subscribed by over four times, Setty also spelled out the revised capital levels.
The common equity tier-I capital will increase to 11.5 per cent, he said, adding that the bank's objective is to take the level up to 12 per cent.
The bank is all set to book gains from its share sale in Yes Bank and also has a slew of other assets including stakes in its insurance arms from where it can raise more funds.
Setty said nearly two-thirds of the investors in the recent issue were from outside the country, and added that the same provides confidence to all stakeholders.
Meanwhile, in a note published on Monday, global ratings agency Moody's Investors Service said the bank will be able to post a credit growth of 12 per cent in FY26, at par with the banking system growth.
The agency affirmed the bank's Baa3 rating and also upgraded the baseline credit assessment while maintaining a stable outlook.
"SBI's strongest retail franchise amongst Indian banks, access to low-cost deposits, and sufficient holdings of liquid government securities support its funding and liquidity," the agency said.
The upgrade of the bank's BCA is driven by our expectation that the bank's internal capital generation along with opportunistic external capital raise will improve its capitalisation over the next 12-18 months, bringing its standalone credit profile in line with the other similarly rated peers, it said.
SBI's adequate net interest margin, diversified non-interest income and low credit cost support its profitability, it said.
However, the bank's profitability is set to moderate in the next couple of quarters because of policy rate cuts feeding through its lending rates, the agency said, adding that a gradual lowering of funding costs in the latter half of the fiscal year will be of help to the bank.
The bank scrip closed 0.71 per cent up at ₹820.75 apiece on the BSE on Wednesday as against gains of 0.66 per cent in the benchmark.