The Hindu Business Line : SBI rights issue may open on Feb 18

The Rs 16,700-crore rights issue of State Bank of India is likely to open on February 18. Official sources said that the country’s largest commercial bank would go ahead with the rights issue as planned, despite the recent turbulence in the capital markets.

SBI is offering one share of Rs 10 each for every five held at a price of Rs 1,590 per share. The Government, which currently holds 59.73 per cent stake in SBI, plans to issue bonds worth Rs 10,000 crore to the bank towards its share in the rights issue.

The rights issue is likely to be open for a month for subscription.

Indications are that the Government would subscribe to the rights offering on the last date of the issue.

Merger

Meanwhile, the Union Cabinet is likely to take up for approval the proposed merger of State Bank of Saurashtra (SBS) with SBI next week.

“The clearance from the RBI is expected today. We are also likely to get technical clearance from the Law Ministry soon,” a Finance Ministry official said.

Once the Cabinet approval is obtained, indications are that the Centre would move a Bill in the ensuing budget session of Parliament to repeal the State Bank of Saurashtra Act.

State Bank of Saurashtra is the smallest of the seven associate banks of the SBI. The Government is already facing pressure from the Left parties and certain MPs on the issue of merger of associate banks with SBI.

They have urged the Government not to go ahead with the consolidation plans within the SBI group.

On Friday, SBI’s share price closed at Rs 2,192.10 at the National Stock Exchange.

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