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SBI raises Rs 5,681 cr by issuing preference shares to govt

Shares were issued at a price of Rs 269.59 per unit of face value of Re 1 each

Press Trust of India  |  New Delhi 

sbi, SBI, state bank of india
State Bank of India

State Bank of India (SBI) on Friday raised Rs 5,680.99 crore by issuing preferential shares to the government.

The Committee of Directors for Capital Raising of accorded approval to allot 21.07 crore equity shares on preferential basis to the Government of India, the bank said in a regulatory filing to stock exchanges.

Shares were issued at a price of Rs 269.59 per unit of face value of Re 1 each, including a premium of Rs 268.59 per unit for a total consideration of Rs 5,680.99 crore.

The fund infusion is part of total capital support of Rs 7,575 crore to fixed for the current financial year.

On Thursday, the Ministry asked the country's largest lender to initiate regulatory process to receive the remaining 25 per cent, or Rs 1,894 crore, capital support. The government is expected to provide the remaining amount to the bank by March 31.

The government, in July last, had announced a total capital infusion of Rs 22,915 crore to 13 PSU banks, including SBI, PNB and IOB, in this fiscal to enhance their lending operations.

The Ministry had alloted 75 per cent of the amount initially while the rest was withheld.

"Consequent upon the above exercise, 75 per cent of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to enable to raise funds from the market," Ministry had said in a statement then.

The remaining amount, to be released later is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations, it had said.

The funds raised by will help meet global risk norms under Basel III.

As of quarter ended December 31, 2016, the equity held by the government in SBI was at 61.1 per cent.

Shares of SBI closed 2.83 per cent lower at Rs 251 on BSE on Friday.

Meanwhile, another public sector lender Union Bank of India approved allotment of equity shares on preferential basis to Government of India for an amount aggregating up to Rs 541 crore.

Further issue and allotment of equity shares on preferential basis to the Government of India for an amount aggregating up to Rs 180 crore including premium subject to approval.

The government had approved Rs 721 crore capital infusion in Union Bank of India for 2016-17 and the allotment is being done on the basis of 75 per cent in the first phase and 25 per cent in the second phase which should be complete by March 31.

First Published: Fri, January 20 2017. 22:28 IST
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