SBI seeks to raise Rs20,000 crore; rights route likely
08 Jul 2011
State Bank of India, the country's largest lender by assets, will submit a fresh plan next week to raise Rs20,000 crore through a rights issue. It is also considering other options to raise the amount, like a follow-on equity offering or direct sale to institutions, chairman Pratip Chaudhuri said on Thursday.
"A draft proposal (for the rights issue) is with us. We are going to submit it this month to the ministry," he said in New Delhi, adding that the bank expects to complete the fund-raising by December.
He said the government would continue to own a 59.4-per cent stake in the bank after the rights issue.
The bank had raised over Rs16,000 crore through a rights issue in 2008, which was well received - even though it came after the Lehman Brothers collapse, which had shattered investor confidence globally.
In March 2011, Parliament passed the SBI amendment bill, paving the way for the government to bring down its stake in the bank to 51 per cent - a move that throws up other fund raising options like a follow-on equity issue.