SBI looks to raise Rs15,000 crore

Mumbai: The State Bank of India (SBI) is looking to raise Rs.15,000 crore from the markets.

In a notice to the exchanges on Tuesday, the country’s largest lender said it’s board has decided to take an enabling provision to raise additional equity capital via a follow on public issue, rights issue or private placement, including a possible qualified institutional placement (QIP) issue.

The fund-raising plan comes after the government said it would allow its stake in state owned banks to fall to 52%. The government holds 58.6% in SBI.

The fund-raising is subject to approvals from the government and the Reserve Bank of India, SBI said in it’s statement to BSE.

SBI last raised equity capital in January last year in a issue that had seen tepid response from foreign investors. At the time, the bank had raised Rs.8,032 crore, with the Life Insurance Corp. of India (LIC) subscribing to over 40% of the issue.

Since then, however, the sentiment towards the Indian equity markets has changed and foreign investors have been actively buying into the secondary markets on hope a revival in economic growth in 2015-16 and beyond.

The central government has also hinted at reforms for state-owned banks as part of which it intends to give these banks greater functional autonomy.

State-owned banks have also been allowed to raise additional equity capital, with the government saying it will allow its stake in these banks diminish to 52%.

India’s state-owned banks will need between Rs.1.5 trillion to Rs.2.2 trillion in additional capital by 2018-19 to meet international capital requirements set under the Basel 3 norms, according to a Moody’s report released in September 2014.

State Bank of India