SBI rights issue may happen by December

SBI rights issue may happen by December

Mumbai: Country’s largest lender, State Bank of India, is likely to hit the market with its rights issue by the year-end to mop up around Rs20,000-crore, a senior bank official said.

This would enable the banking behemoth to fuel its business plans, particularly in the face of rising competition from its deep-pocketed rivals, both private and overseas.

“This (rights issue) could happen by November-December. We expect to raise around Rs20,000-crore through this exercise," the official, who did not want to be named, said.

The banking major is likely to approach the Government with its rights issue plan in the near future, the official said.

The Government, which presently holds just above 59% stake in SBI, had recently placed the SBI Amendment Act in Parliament.

The Bill allows SBI to dilute the state holding to 51% and thus raise necessary equity capital as and when required.

Recently, SBI chairman, O P Bhatt, had said that the bank would prefer a rights issue to dilution of Government holding to raise funds, as it wished the Government to continue as the majority shareholder.