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How SBI Is Going To Manage Its Rs15,000 Fund Raising Plan?

The State Bank of India has invited bids from investment bankers (or book running lead managers) for its proposed Rs 15,000 crore capital raising plan.

The country’s largest lender received Board approval to raise the amount for the fiscal year ending March 2018, which may be mopped up through a QIP, FPO (qualified institutional placement, follow-on public offer) or a rights issue.

If completed, this issue will be the first such sale by SBI since 2008 when it had raised Rs 16,740 crore by selling shares via a rights sale.

The submission date of bids by merchant bankers for managing the QIP/FPO issue is closing on May 22.

In March, in a statement on the BSE, SBI had said the sale could be an FPO, QIP, rights issue, Global Depository Receipt, American Depository Receipt or combination of these.

Upon approval by the shareholders on June 15, the state-owned bank will be able to raise Rs 15,000 crore by selling shares in India or abroad anytime this year.

SBI’s capital adequacy ratio (CAR) as on December stood at 13.73 percent, well within the minimum requirement of 9 percent.

Banks have been looking at raising funds from the market and sell stake in their non-core assets after the government restricted capital infusion asking banks to fend for themselves to meet the capital requirements.

Last year, SBI had received Rs 7,575 crore from the government as part of its capital infusion plan, while it has slated Rs 10,000 crore cumulative for all banks in 2017-18 and 2018-19 each.

Market estimates that public sector banks would require Rs 1.80lakh crore to meet Basel III norms, while the government will provide only Rs 70,000crore for a four-year period till 2019.

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