State Bank of India will be able to mop up Rs 20,000 crore through a rights issue only early next financial year since Government approvals are not yet in place, according to its chairman.

Since the bank has so far not heard from the Government about the rights issue, it is unlikely that the same will go through before the end of the current financial year, said Mr O.P. Bhatt, SBI Chairman, on the sidelines of Indian Banks' Association's annual Banking Technology Summit.

In the last few months there has been a constant buzz in the market about the rights issue of India's largest lender. “Hopefully, it will happen during the early part of next financial year,” Mr Bhatt said. Even as SBI is awaiting the Government's green signal, its associate bank — State Bank of Bikaner & Jaipur — will be deciding on its Rs 800-crore rights issue on March 7. In August 2010, another associate bank — State Bank of Mysore — had raised Rs 583 crore through a rights issue.

To maintain its stake at 59.4 per cent in the bank, the Government has to chip in with about Rs 12,000 crore to subscribe to the rights issue. The bank had last tapped the rights issue route in 2008 when it raised over Rs 16,000 crore.

Meanwhile, the bank said it will retain up to Rs 5,500 crore of the total subscriptions received from retail investors in the retail bonds issue and return the rest.

The bank's Rs 1,000-crore retail bonds issue got subscription of over five times from the retail investors, with the overall subscription, including those by high net worth individuals and qualified institutional bidders, being pegged at around nine times.

“Provisional data show that retail bidders put in bids aggregating over Rs 5,000 crore. Qualified institutional bidders and high net worth individuals have put in bids aggregating about Rs 3,500 crore and a little over Rs 500 crore,” said a merchant banker dealing with the bond issue. The issue opened on February 21 and closed on February 28.

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