SBI share sale could be advanced to March

A Rs 15,000-crore share sale by the country’s biggest lender, State Bank of India (SBI), could be launched as early as this month, said sources. The lender, with market value of Rs 2.17 lakh crore, plans to launch a follow-on public offering (FPO) under the fast-track route, under which the regulatory approvals required to come out with a public issue are less.

The bank has sounded off all the nine bankers managing the share sale to be ready to hit the market “anytime”, said a banker handling the issue, asking not to be named.

Bankers have already started talks with potential large-size investors, gauging the overall appetite for the one of the largest share sales to hit the Indian markets.

Bank of America Merrill Lynch, Barclays, Citibank and Goldman Sachs are among the foreign banks handling the equity fund raising exercise. Axis Capital, SBI Capital Markets, JM Financial, ICICI Securities and Kotak Mahindra Bank are the domestic ones working on the transaction.

“All the approvals are in place. The market is going through a risk-off phase. As soon as the market conditions improve, the FPO could be launched,” said a banker.

Shares of SBI have under-performed the market this year. The stock is down nearly seven per cent, even as the benchmark Sensex has risen five per cent so far in 2015. The shares closed at Rs 290.65, down one per cent, on Monday.

The option of raising money either through an FPO or a qualified institutional placement (QIP) are being kept open. The government, which owns 58.6 per cent stake in the lender, wants the fund raising to take place through the FPO route, to ensure wide participation from all categories of investors.

Currently, the 12-month price target for SBI is Rs 350, about a fifth up from current levels, according to a consensus analysts' estimate complied by Bloomberg. SBI had raised Rs 8,000 crore through a QIP in January last year. The share sale saw lukewarm response for investors but it gave them good returns, as the stock rallied 75 per cent in 2014.

State Bank of India