SBI Gets Investors' Nod for Raising Rs 15,000 Cr From Market

New Delhi: State Bank of India (SBI) on Thursday received shareholders' approval for raising Rs 15,000 crore through a public offer, including a rights issue, to fund business and meet global capital adequacy norms.

A general meeting held on Thursday approved "to create, offer, issue and allot, such number of equity shares of Rs 1 each, not exceeding Rs 15,000 crore or such amount as approved by the Government of India and RBI...," SBI said in a filing to the BSE.

It would be "subject to the condition that the government's shareholding in equity share capital of the bank does not fall below 52 per cent at any point of time, by way of public issue", it said.

Public issue, it said, would include follow on public offer or rights issue or private placement including QIP, ADR, GDR or any other mode decided by the board. Shares in the country's largest lender ended at Rs 289.55 apiece on Thursday, up 2.03 per cent from the previous close.

The bank requires adequate capital to match the anticipated growth in asset and comply with stipulated level of capital adequacy.

The move comes in the backdrop of the Cabinet permitting banks to lower the government holding from 58 per cent to 52 per cent enabling lenders to raise funds from the market to meet Basel III norms.

Government holds a 58.60 per cent stake in the bank.

Last year, SBI raised Rs 8,032 crore by selling shares through the qualified institutional placement route to fund its business growth.

Besides, the government infused Rs 2,000 crore capital in the bank during the last fiscal year.

For the current fiscal year, the government has earmarked Rs 11,200 crore for capital infusion in various public sector banks including SBI. The disbursement may take place during this quarter.

The statement further said that the quantum and mode, number of tranches, price or prices, discount or premium, reservations to employees, customers, existing shareholders will be decided by the board at a later date.

SBI had raised over Rs 16,000 crore through a rights issue in 2008. In the last SBI rights issue, the government contribution was in the form of bonds to the bank instead of cash.

Earlier this month, HDFC Bank raised about Rs 10,000 crore by selling American Depository Receipts and India-listed shares to qualified institutional investors in the largest follow-on offer by a private sector firm.

The bank raised $1,270.72 million (about Rs 8,000 crore) by issuing 22 million ADS to global investors. It raised about Rs 2,000 crore from a QIP (qualified institutional placement) in the domestic market.