State Bank of India (SBI) has raised Rs 25,000 crore through qualified institutional placement (QIP), with Life Insurance Corporation of India (LIC) as the largest subscriber.

The state-owned bank, which approved the country’s largest QIP and allotment of 30.6 crore shares at an issue price of Rs 817 each, will use the capital to fund business growth.

LIC acquired 6.1 crore shares for 5,000 crore, taking its shareholding in SBI to 9.49% from 9.21%. LIC said it expects to receive the shares by 23 July and for them to be listed the next day. 

The QIP was oversubscribed 4.5 times, with 64.3% bids being made by foreign investors. The shares were issued to Societe Generale, HDFC Life Insurance, HDFC MF (various schemes) and Quant MF, among others.

SBI said marquee long-term investors received around 88% of the final allocation, including 24% of the issue size getting placed with foreign long-term investors.

The capital will augment the bank’s CET-1 buffer, improving it to 11.5% from 10.81% as on 31 March 31.

The funds will be used to support calibrated credit growth across the retail, MSME and corporate segments.

SBI Chairman C S Setty said, "This landmark equity raise is a vote of confidence in SBI's solid fundamentals, prudent risk management and digital-first growth agenda."

SBI had last tapped the QIP in FY18, when it had raised Rs 18,000 crore. 

The country’s largest lender has plans to raise further funds in the current financial year. The bank has received board  approval to raise up to Rs 20,000 crore through additional tier-1 and tier-2 bonds in FY26, in one or more tranches.