SBI Prefers Rights Issue To Raise Capital (10-Mar-2010)
In order to fund for business growth, State Bank of India, Country''s largest lender, would prefer a rights issue to raise funds instead of diluting the holdings of the government, bank''s chairman O P Bhatt said.
Bhatt told the reporters that he wants the government to remain as the major stake holder in SBI.
He also said that "if there is an opportunity to raise capital quickly and efficiently, we would like to do that (rights issue) ... it gives us a lot of flexibility in future".
Recently, the government presented the SBI Act Amendment Bill in the Lok Sabha with an aim to lower the state-holding in the bank from around 59 per cent currently to 51 per cent.
However, Bhatt indicated that the bank is unlikely to go for the rights issue immediately as it has sufficient capital as well as good liquidity position at the moment.
SBI has a surplus liquidity of around Rs 50,000 crore as against Rs 75,000 crore in December.
Besides this, regarding the merger of State Bank of Indore with it, Bhatt said that the government as well as the board of both the banks needs to clear the proposal. The entire process may take over a month to get completed.
Meanwhile, SBI is looking at the option to go for a 10-year retail bond issue in the next fiscal.
To start with, the bank will garner in the range of Rs 50 crore and Rs 100 crore through the bond issue, which will carry a market-related interest rate, said the SBI Chairman, Mr O. P. Bhatt, at an event on ''Conscious capitalism'', organised by the Confederation of Indian Industry.
However, regarding the credit offtake status in the last quarter, Mr Bhatt said that though credit offtake is there, it is not much and there will not be any pressure on the profitability than in the past.
SBI is currently trading at Rs.2025.05, up by 0.54%.
The stock hit an intraday high of Rs.2041.9 till now, as against the 52-week high of Rs.2500.The stock hit a low of Rs.2024.05 during the day. The stock had hit a 52-week low of Rs.898 on March 12, 2009.
The stock opens at Rs.2037 at BSE. The total traded volume of the scrip on BSE till now stood at 28958.
Meanwhile today, the BSE Sensex is trading down by -33.31 points, or -0.19% , at 17065.02 on 9:30 AM.
The NSE Nifty is trading down by -5.70 points, or -0.11% , at 5110.55.
SBI has an equity capital of Rs 634.88 crore as of 2009 Dec. The face value per share is Rs 10. At the current price of Rs 2025.05, the P/E multiple stood at 14.1137901272378 with book Value of 912.73 and P/BV at 2.22.
The total shareholding pattern of the company as on Dec 2009 stood at Promoters- 59.41%, Institutional Investors- 27.20%, General Public- 5.87% and other investors- 7.52%.
Considering the current price of Rs. 2025.05 at 9:30:00 AM , the stock had underperformed the market over the past one month till 11/03/2010 surged 3.78% as compared to the Sensex''s return of 6.38% and NSE Nifty''s 6.38 % returns.
Considering the current price of Rs. 2025.05 at 9:30:00 AM , the stock had underperformed the market over the past one quarter till 11/03/2010 fell -9.93% as compared to the Sensex''s return of -0.19% and NSE Nifty''s -0.19 % returns.
State Bank of India (SBI) has posted a net profit of Rs 24790.50 million for the quarter ended December 31, 2009 where as the same was at Rs 24784.20 million for the quarter ended December 31, 2008. Total Income is Rs 211454.00 million for the quarter ended December 31, 2009 where as the same was at Rs 203059.00 million for the quarter ended December 31, 2008
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