SBI eyeing QIP, rights issue unlikely in FY12: Sources

State Bank of India is considring a qualified institutional placement (QIP) of shares in FY12, as its proposed rights issue of shares is unlikely to go through this year, a senior bank official said today.

“The QIP plan is a contingency,” the official said, adding, “But it is still on the drawing board stage. Officially, we are sticking to the October-December rights issue plan, but we have received indication from the government that it will not happen this (financial) year.” SBI shares today closed 1.6 per cent higher at Rs 2,379.55 on the National Stock Exchange.

As the government's financial position is currently constrained, it may not be able to subscribe to its share of SBI's rights issue, said the official. He said the government had assured SBI officials that if the bank had any unexpected capital requirement during the year, it would get assistance.

“We will have to use up some more of our Tier-I capital to fund growth. We could also increase the raising of Tier-II capital to ensure clients' requirements are met,” the official said. The government had promised SBI it would accommodate the bank’s rights issue in its planned expenditure for 2012-13. SBI Chairman Pratip Chaudhuri had recently said the bank would submit a revised proposal on the rights issue to the government.