SBI shares drop 3% amid plans for equity capital raise

State Bank of India (SBI) shares fell by 3% to ₹784.45 on the Bombay Stock Exchange (BSE) during Wednesday's trading session. This decline comes amid profit booking after the bank announced its intention to raise equity capital within the current financial year to support business growth. Since 1 March 2025, SBI's stock has appreciated by 18%, rising from ₹688.25 to ₹811.75 as of 29 April 2025. The stock achieved its highest price this year at ₹835.45 on 22 April. The anticipated capital raise aims to bolster the bank's business operations.

SBI's board meeting, scheduled for 3 May 2025, is expected to discuss and potentially approve the proposal for raising equity in FY26. The capital raising could be conducted through a Follow-on Public Offer (FPO), Rights Issue, Qualified Institutional Placement (QIP), or a combination of these methods. These initiatives will require approval from the Government of India and the Reserve Bank of India. In FY18, SBI raised ₹15,000 crore through QIP, marking it as the largest such venture in India and the third largest in the Asia-Pacific region at that time. "SBI said in its FY18 annual report."

As India's largest bank, SBI's strong deposit base and diverse offerings bolster its credit standing. "SBI is the largest bank in India with a significant geographic and product diversity. India's good growth prospects will also support its loan growth, asset quality, and profitability."

According to S&P Global Ratings, SBI's nonperforming and restructured loans are forecasted to remain between 2.5% and 3% over the next 12 to 18 months, while credit costs are anticipated to stay below 1% during this timeframe. This stability is attributed to the favourable growth prospects of the Indian economy, which are expected to support SBI's business performance.