State Bank of India, the country’s largest lender, is moving ahead to raise Rs 10,000 crore from the market.
SBI’s sale will boost its capital buffers as the bank attempts to grow loans at a faster pace. Credit growth in India’s banking system is rising at the fastest pace in five years after a cash crunch in 2018 curtailed new loans from non-banking financial companies.
While the terms of the offering haven’t been finalised, details such as the fundraising target are likely to change, merchant bankers said. The bank has selected Bank of America Corp, CLSA Ltd and HSBC Holdings Plc as underwriters for an institutional share sale. Kotak Mahindra Bank and SBI Capital Markets were also chosen to work on the deal.
In December 2018, SBI said it has received shareholders’ approval to raise up to Rs 20,000 crore through sale of shares. The country’s largest lender held a general meeting of its shareholders in Mumbai to seek approval for the business as a special resolution, it said in a regulatory filing last month.