Bhatt: Growth issue

New Delhi, Oct. 5: The State Bank of India (SBI) follow-on public offer issue will hit the market between November and January.

“We would like to raise Rs 10,000 crore. On current valuations, the government stake will be diluted by 2.5 to 3.0 per cent after the proposed share sale,” chairman . P. Bhatt said. The government now owns 59.73 per cent of the bank.

It is awaiting the finance ministry’s nod to meet additional capital requirements for business growth and statutory requirement. Bhatt said, “We have discussed with the finance ministry and are waiting for a clearance. Once we get it, capital will be raised within 90 days.”

The bank had explored three to four options such as a rights issue, a public offer and a preferential share sale, Bhatt said. The funds will be raised between November and January, though loan growth has slowed down, he added.

Bhatt said the bank did not plan a stock split before the proposed issue. The bank needs Rs 4,800 crore to meet the Basel II capital adequacy norms by the end of March 2008.

The SBI may require up to Rs 50,000 crore during the next three years to grow its business and invest in its insurance, private equity and wealth management ventures.

BoI stake sale

The Bank of India (BoI) is planning to dilute 5 per cent of the government’s stake in the bank. “We are looking at a 5 per cent dilution,” said T.S. Narayanasami, chairman and managing director of the BoI. At present, the government owns 69.4 per cent.

The resources raised will enable the BoI to fund new businesses and help meet Basel II norms. However, Narayanasami did not give any time frame for the offer.