SBI to raise Rs16,736 crore through rights issue

Mumbai: State Bank of India (SBI), the country's largest lender, will raise Rs16,736.31 crore through a rights equity issue, the public sector bank said in a statement.

SBI will offer rights shares on the basis of one each for every five shares held and the issue would be priced at Rs1,590 a share, SBI informed the Bombay Stock Exchange (BSE) in a statutory filing.

The offer price represents a 36 per cent discount to SBI's current share price.

This means shareholders would get a share at a premium of Rs1,580, if the face value of Rs10 is considered, but at a discount of Rs889, at the current price of RsRs2,469 on the Bombay Stock Exchange.

The central board of the bank at its meeting held on January 14 has decided to increase the issued capital from Rs526.30 crore to Rs650 crore, to raise an aggregate amount of Rs16,736.31 crore (including premium) by way of rights issue offer in the ratio of one share for every five shares at a price of Rs1,590 per share to the eligible shareholders as on the record date, the statement said.

SBI would also issue shares to employees under employees stock purchase scheme, SBI said in the filing with BSE.

The decision of the SBI's board came one-and-a-half months after the Union cabinet gave nod to the rights issue.