New Delhi: Country's largest lender, the State Bank of India (SBI) on Monday said its Central Board in a meeting held on Monday decided to raise Rs 16,736.31 crore through a rights issue to Government of India and to other eligible existing shareholders, including GDR holders.
The bank will issue one share for every five shares held by eligible shareholders which is expected to fund its business growth and meet Basel-II norms.
The price for the issue has been fixed at Rs 1,590 per share, said a statement. However, it has not fixed the date for such issue.
Government, which has a 59.73 per cent stake in the bank, had in November 2007, given its nod for the issue and decided to invest Rs 10,000 crore in the offering by issuing bonds to SBI.
The bank could not go for a follow-on public offer since current stipulations does not allow government holding to go down below
55 per cent.
While private commercial lenders like ICICI bank has been on a cash raising spree, the public sector bank was facing credit woes due to a depleting capital base. The bank has also decided to increase the Issued Capital of Bank from Rs 526.30 crore to Rs 650 crore.
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