The State Bank of India (SBI) has appointed nine financial advisors to manage its R12,500-crore equity offering ($2 billion) that will help the public sector lender boost credit and meet tighter capital requirements amid rising bad loans.
The mode and timing of the share sale will be finalised after completing all formalities, sources familiar with the matter told FE.
Axis Capital, Bank of America Merrill Lynch (BofA ML), Barclays, Citigroup, Goldman Sachs, ICICI Securities, JM Financial, Kotak Investment Banking and SBI Capital Markets will manage the share sale — the largest equity offering by an Indian bank and the fifth largest overall, showed data compiled by Prime Database.
The bank will get a capital infusion of R2,500 crore as part of the government’s plan to recapitalise public sector banks.
SBI sought shareholders’ approval on February 26 to raise R15,000 crore from public investors, the company had said in a stock exchange announcement on January 27.
SBI had a capital adequacy ratio of 12.33% and gross bad loans stood at R60,712.38 crore, representing 4.89% of total loan book, September quarter data showed. SBI will report its December earnings for the quarter ended December on February 13.
Bad-loan provisions of Indian banks, such as ICICI Bank and Punjab National Bank (PNB), substantially increased in the December quarter, according to their most recent quarterly results.
Market experts have a positive view on State Bank of India , though, citing improvement in provision coverage ratio (PCR), net interest margins (NIMs) and stability in NPAs.
As many as 47 — or 79.7% — of analysts have a ‘buy’ rating on SBI. Six analysts have a ‘hold’ rating and six ‘sell’, showed an analyst poll by Bloomberg.