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SBI says may not need capital for one year post Rs15,000 crore QIP

LiveMint logoLiveMint 09-06-2017 PTI

Mumbai: After raising Rs15,000 crore through the biggest-ever equity issuance in the country, State Bank of India (SBI) on Friday 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 Rs15,000 crore through qualified institutional placement (QIP). It issued around 52.21 crore new shares at a price of Rs287.25.

“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.

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 the Clearing Corporation of India Ltd (CCIL), National Stock Exchange of India and Unit Trust of India (UTI) Mutual Funds.

SBI’s QIP was over-subscribed and demand exceeded Rs27,000 crore.

“There was huge demand from DIIs (domestic institutional investors), FIIs (foreign institutional investors), 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 Rs11,000 crore. DII demand was of Rs8,500 crore excluding one DII, she said. Life Insurance Corporation (LIC) had asked for 38% share in the total QIP but Bhattacharya said only 77% of its total demand was alloted. LIC’s stake after this investment would be 10.4%, up from 8.6%.

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% in the current fiscal and 14% in fiscal 2018-19. Post issue, the bank’s capital to risk (weighted) assets ratio (for the merged entity) is at 13.64% and common equity tier-1 at 10.20%.

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