SBM to raise Rs 425 crore through rights issue

State Bank of Mysore (SBM) plans to raise Rs 425 crore through a Rights Issue to augment its equity capital. The board of directors of the Bank, which met on March 29, accorded an in-principle approval to launch a Rights Issue to raise the funds. The amount includes premium.

The Bank, however, is yet to fix the face value and decide other modalities. "We have just taken the Board approval. We will now go to the RBI and government of India approval. Only after that we will decide the face value and finalise other modalities," said a Bank official.

State Bank of India is the largest shareholder of the Bank with 90% of the equity, while the balance 10% is held by the public shareholders.

Currently, the Bank's capital adequacy ratio under Basel-II stands at 11.40% and 11.19% under the Basel-III norms.

Under Basel-II, the Tier-I capital stands at 8.7% and 8.58% under the Basel-III as at end of December 2013.

The Bank had raised Rs 65 crore through an institutional placement programme (IPP) in May last year.

For the third quarter ended December 2013, SBM reported a massive fall of 45% in its net profit at Rs 85 crore compared

to Rs 154.77 crore in the corresponding quarter last fiscal. The total income went up 7% to Rs 1,730 crore as against Rs 1,616 crore in the year ago period.

The Board, at its meeting, also approved an Interim Dividend at the rate of Rs 3 per equity share of Rs 10 each (30%). Interim dividend will be paid on April 22, 2014, the Bank said in a filing to BSE.

The Bank's stock closed 2.15% lower at Rs 417.10 per share on Bombay Stock Exchange on Tuesday.