1. SBI says may not need capital for one year post Rs 15,000 crore QIP

SBI says may not need capital for one year post Rs 15,000 crore QIP

After raising Rs 15,000 crore through the largest-ever equity issuance in the country, State Bank of India today said it is comfortable on the capital front and will not seek any capital infusion from the government in the current fiscal.

By: | Published: June 9, 2017 5:03 PM
The bank recently raised Rs 15,000 crore through qualified institutional placement (QIP). It issued around 52.21 crore new shares at a price of Rs 287.25.

After raising Rs 15,000 crore through the largest-ever equity issuance in the country, State Bank of India today said it is comfortable on the capital front and will not seek any capital infusion from the government in the current fiscal. The bank recently raised Rs 15,000 crore through qualified institutional placement (QIP). It issued around 52.21 crore new shares at a price of Rs 287.25.

“As per the plan we have put in place, we are quite comfortable on the capital front till next year. We will not require government funds (in FY18). At this point we have not asked for capital (from the government). “Even without this capital raising, we can meet all the regulatory capital requirements up to 2019, including Basel III need. This is over and above that,” SBI chairman Arundhati Bhattacharya told reporters here today.

Bhattacharya said in the current fiscal the bank will be focusing on listing its life insurance arm. “We have plans of unlocking value by listing at least the life insurance subsidiary. So there will be some more (capital) that we (will) get through our non-core divestments,” she said.

It may also consider some stake sale in its non-core assets including CCIL, NSE and UTI MF. SBI’s QIP was over-subscribed and demand exceeded Rs 27,000 crore. “There was huge demand from DIIs, FIIs, sovereign wealth funds and many investors who have never invested in the country. Most of the investors are those who have never invested in a public sector institution earlier,” Bhattacharya said.

The issue received an overall FII demand in excess of Rs 11,000 crore. Domestic institutional investors’ (DIIs) demand was of Rs 8,500 crore excluding one DII, she said. LIC had asked for 38 per cent share in the total QIP but Bhattacharya said only 77 per cent of its total demand was alloted.

LIC’s stake after this investment would be 10.4 per cent, up from 8.6 per cent. Bhattacharya said the QIP was aimed at supporting growth which seems to be around the corner.

The bank expects a credit growth of 10-12 per cent in the current fiscal and 14 per cent in fiscal 2018-19. Post issue, the bank’s CRAR (for the merged entity) is at 13.64 per cent and CET 1 at 10.20 per cent.

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