The much-awaited rights issue by India?s largest lender, State Bank of India (SBI), is finally taking off with the issue being offered at a discount of 54.85%, or Rs 872.25, compared to its closing price.
SBI will offer the rights shares to shareholders in the ratio of one rights share for every five shares held. The rights share with a face value of Rs 10 each will be offered at a premium of Rs 1,580.
SBI stock ended the day at Rs 2,462.25, gaining Rs 25 or 1.03%, on the BSE on Monday.
The ratio for the rights issue has been fixed at 1:5, that is, one share for every five shares held by the eligible shareholders on the record date. The bank has fixed February 4, 2008 as the record date for the purpose of the rights issue. This means only SBI shareholders who are actual beneficial owners of these shares on or before February 4 will be eligible for the rights issue.
The central board of the bank at its meeting held on Monday decided to raise an aggregate amount of Rs 16,736.31 crore by way of the rights issue offer to the government and other eligible existing shareholders, including GDR holders, at Rs 1,590 per equity share of Rs 10 each. The bank would also issue shares to employees under the employees? stock purchase scheme.
The board has also decided to increase the issued capital of the bank from Rs 526.30 crore to Rs 650 crore.