State Bank of India (SBI) has sought bids from merchant bankers to run the process for its qualified institutional placement (QIP) of shares worth up to Rs 20,000 crore. “The bank intends to tap capital markets via QIP. The shareholders in accordance with Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2009, accorded approval for raising equity capital not exceeding Rs 20,000 crore,” SBI said in a bid document.
“However, the issue size may vary based on various factors including but not limited to the decision of the shareholders and management discretion, etc. The bank intends to initiate the work relating to appointment of BRLMs (book running lead managers) and other intermediaries to prepare the requisite documents and to undertake other related activities in relation to the QIP.” SBI will select and appoint up to five merchant bankers with requisite experience, excluding SBI Capital Markets, who will together be designated as BRLMs. The BRLMs, in consultation with SBI, will form a syndicate as required under the applicable law, guidelines and regulations.
The last date for interested parties to submit their bids is January 5, following which presentations will be made by bidders on January 7. Earlier this month, SBI had received shareholders’ nod for fundraising to the tune of Rs 20,000 crore through sale of shares, following board approval for the fund-raise. After the bank announced its results for the September quarter, chairman Rajnish Kumar had said the money raised will be deployed specifically for growth.
“Whatever capital we raise will be for growth. We don’t need any capital for the risk purposes or meeting our capital requirements. Growth seems to be very good and opportunities seem to be very good. If the pricing is good, environment is good, growth potential is there, then we will decide (on the issue),” he had said. The bank has guided for credit growth in the range of 10-12% for FY19.
In June 2017, SBI had raised Rs 15,000 crore through India’s largest-ever QIP, which took the government’s share in the lender to 57.07%. On Monday, SBI’s shares ended 0.39% higher than their previous close at Rs 292.80 on the BSE.