SBI To Raise Funds Via FPO, QIPs; To Appoint Six Merchant Bankers
Other state-owned lenders too have evinced interest in raising funds from the market.
The country's largest lender State Bank of India on Tuesday said it plans to raise funds from capital markets in the current fiscal but did not specify the amount.
A successful public offer by SBI would encourage other public sector banks to tap the market as 21 banks put together need to raise Rs 1.10 lakh crore by March 2019 to meet the global capital adequacy norms, Basel III.
Many other state-owned lenders, including Dena Bank, have evinced interest in raising funds from the market.
State Bank of India, which last month merged with itself five associate banks and the Bharatiya Mahila Bank, will raise funds through follow-on public offer or qualified institutional placement to expand business. It has sought applications from merchant bankers for managing the issue.
The issue size may vary based on various factors including but not limited to management discretion and the decision of the shareholders.SBI Statement
The bank said it proposes to appoint up to six merchant bankers with requisite experience. Together they will be designated as Book Running Lead Managers (BRLMs).
The last date for submission of bids for the Request For Proposal (RFP) will be May 22.
SBI has already taken board approval to raise up to Rs 15,000 crore through various means including public offer and overseas issuance of shares in the current fiscal.
In 2014, SBI has raised Rs 8,032 crore by selling shares through qualified institutional placement (QIP), largely aided by state-owned life insurer Life Insurance Corporation of India (LIC). The bank sold 5.13 crore shares at an average price Rs 1,565, which was the lower side of the price band it had set.
Post-equity allotment, government stake will come down to 58.6 percent from over 62 per cent.
SBI, with a market share of about 20 percent, has a branch network of around 24,000 and nearly 59,000 ATMs across the country. The bank has a deposit base of more than Rs 26 lakh crore and advances level of Rs 18.50 lakh crore. For the nine-month period of 2016-17, SBI's standalone net profit was Rs 7,669 crore, while its standalone operating profit was Rs 34,821 crore.
Government of India currently holds 62.22 percent stake in the Bank as of March 2017.
In a stock exchange filing, the bank said a general meeting of the shareholders of SBI will be held on June 15 to elect four Directors to the Central Board of the bank.
Meanwhile, the government will continue to support public lenders based on requirements as was announced by the Finance Minister in his Budget speech, said an official.
In the Budget 2017-18 speech on February 1, Finance Minister Arun Jaitley announced capital infusion of Rs 10,000 crore for the current fiscal.
"In line with the Indradhanush road map, I have provided Rs 10,000 crore for recapitalisation of banks in 2017-18. Additional allocation will be provided, as may be required," Jaitley had said.