SBI to raise Rs 20K cr via rights issue,Rs 200 crore from bonds

The countrys premiere lender State Bank of India (SBI) today said it would raise funds worth Rs 20,000 crore through a rights issue and Rs 200 crore from bonds this fiscal for its business growth....

The countrys premiere lender State Bank of India (SBI) today said it would raise funds worth Rs 20,000 crore through a rights issue and Rs 200 crore from bonds this fiscal for its business growth.

We are expecting to raise Rs 20,000 crore from a rights issue, SBI chairman OP Bhatt told reporters on the sidelines of a CII event here.

The issue is likely to come towards the end of this fiscal and the bank is in talks with the government regarding the matter.

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It is still at the conversation stage (with the government). That is why if at all it comes up,it would be towards the end of this fiscal, Bhatt added.

The government is a 59 per cent stakeholder in the bank.

A rights issue is a way in which a company can sell new shares in order to raise capital. Shares are offered to existing shareholders in proportion to their current shareholding.

We would like them (the government) to put about 60 per cent (in the rights issue), Bhatt said.

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As regards the issue of bonds to retail investors,Bhatt added that the bank planned to raise around Rs 200 crore in the first half of the fiscal from the domestic market.

Commenting on the base rate,which would replace the existing benchmark prime lending rate (BPLR) system,Bhatt said the rate for the bank would be between 7.5 and 8.5 per cent.

We are working out the number… it could be between 7.5 and 8.5 per cent, he said,adding that it would be announced by June 15.