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SBI associates may cut share face value to Rs 10

Sidhartha & Freny Patel  |  New Delhi/Mumbai 

Move seen as prelude to public offers by associates.
The has moved the ministry's banking division to the of the equity shares of SBI's associate banks This can be done if the ministry agrees to amend the
The proposal to bring down the to Rs 10 is seen by the market as a prelude to SBI's associates hitting the capital markets either in India or overseas with a public offer.
A senior State Bank executive admitted that the bank had indeed moved the ministry with the proposal but refused to comment on the plan to tap the capital market.
"As of now, all the associate banks are adequately capitalised," the executive said. But ministry sources said the move to bring down the of shares was in line with the government's strategy to encourage state-owned companies and banks to tap the capital market.
The four unlisted SBI associates are State Bank of Hyderabad, State Bank of Indore, The other three are listed.
Big brother's stake
SBI shareholding in associate banks
State Bank of Hyderabad 100.00
State Bank of Indore 98.05
State Bank of Patiala 100.00
State Bank of Saurashtra 100.00
State Bank of Bikaner & Jaipur* 75.00
State Bank of Mysore* 92.33
State Bank of Travancore* 75.00
* listed banks (figures in %)
They are State Bank of Travancore, State Bank of Mysore and State Bank of Bikaner & Jaipur. SBI's stake in these three banks is between 75 and 92.33 per cent.
On account of the high of the shares and the low floating stock in the market, trading volumes for these stocks are low. State Bank of Bikaner & Jaipur scrip is quoting at Rs 1,875.60, State Bank of Mysore at Rs 1,566.60 and State Bank of Travancore at Rs 1,798.20.
Bringing down the will call for an amendment to the Act. The government is expected to give its nod this fiscal.
The SBI stock earlier had a of Rs 100 and the SBI Act had to be amended to bring down the to Rs 10 to pave the path for its IPO. Its public issue carried a premium of Rs 90. Now, the stock is trading at around Rs 470.
posted a net profit of Rs 381.20 crore in 2003-04, Rs 226.26 crore; State Bank of Patiala Rs 430.36 crore and State Bank of Saurashtra Rs 177.39 crore.

First Published: Tue, September 21 2004. 00:00 IST