State Bank to raise Rs 10,000cr in bonds
The board of State Bank of India on Wednesday approved a proposal to raise Rs 10,000 crore through additional tier 1 (AT1) bonds as the country’s largest bank aims to grow its loan book. Banks are witnessing a strong demand for credit: at around 17 per cent, loan growth has outpaced deposit growth at 9 per cent.
SBI recently announced its personal banking advances, excluding high-value home loans, have crossed the Rs 5 lakh crore-mark. The bank took a year to book the last Rs 1 lakh crore of advances against over 15 months for the previous Rs 1 lakh crore and over 30 months for the Rs 1 lakh crore before that.
Several other banks are also in a fund-raising mode by tapping the debt markets to satiate the demand for credit. Lenders have also started hiking deposit rates. HDFC Bank, India’s top private lender, on Wednesday raised most of its retail fixed deposit rates by 40-75 basis points (bps).
Yes Bank has allotted shares and warrants to private equity funds — Carlyle Group and Advent — that will see them pick up 9.99 per cent in the private sector lender. The duo will invest in about Rs 8,896 crore in Yes Bank with the full conversion of warrants into equity.
Yes Bank said in a regulatory filing that it has allotted a total of 369.61 crore shares and 255.97 share warrants convertible into equity shares on a preferential basis to CA Basque Investments, a Carlyle Group entity, and Verventa Holdings Limited, an Advent group entity. Following the allotment of these equity shares, the total issued and paid-up share capital of the lender has increased to Rs 5,750.54 crore from Rs 5,011.31 crore.
CA Basque Investments and Vervanta were both allotted 184.80 shares each at an issue price of Rs 13.78 and 127.98 share warrants carrying a right to exercise. If exercised, it will be one equity share for each warrant at a price of Rs 14.82. Both the private equity players paid Rs 2,546.65 crore each for the shares.
They paid Rs 1,896.78 crore for the warrants, of which Rs 474.19 crore (25 per cent) has been paid upfront. The investment by the PE funds will be one of the biggest in the banking sector in recent times. It was announced after Yes Bank housed nearly Rs 50,000 crore of bad loans in a newly carved asset reconstruction company for which it has tied up with JC Flowers.