The country’s largest bank State Bank of India plans to raise capital during the current financial year and in the next year.
While the size of the capital to be raised has not been disclosed, the issue would be linked to the extent to which the Central Government would be ready to dilute its holding in the bank which at present stands at 58.60 per cent.
In a communication to the stock exchanges, the bank said that its board of directors today approved the issue of equity shares of ₹10 each (post-split ₹1 each) "such amounts as will dilute the Gol shareholding" to the level approved by it (Gol). The amount would be raised from the market or the GoI by way of preferential issue/QIP/FPO/rights issue/GDR/ADR and/or any other mode(s) or a combination(s) thereof as may be cleared by the Gol and RBI. The number of equity shares to be issued would be decided by the Committee of Directors for Capital Raising and the fund raising would be done during FY15 and FY16, the statement from SBI said.
According the BSE data, the promoters (read GoI) hold 58.60 per cent stake in the bank. While FIIs hold 11.18 per cent share in its equity, DIIs hold 20.07 per cent stake and others hold 10.15 per cent share in the bank’s equity as at the end of Sept 2014. Shares of the bank are up by ₹64.80 to ₹2783.95 on the BSE minutes before the market is to close.
The board also authorised the Committee of Directors for Capital Raising to decide on number of tranches and the timing of issue(s) and the size of the issue for raising additional Non-Equity capital by way of AT-1 and/or Tier II bonds in US currency/ Indian rupee considered as regulatory capital under Basel III guidelines, to be issued to Indian and/or overseas investors, in one or more tranches, during FY15 and FY16 through public offer and/or private placement.