Mumbai: SBI will not require fresh capital for two years after its forthcoming Rs 11,500 crore qualified institutional placement goes through, and any overseas bond sale is expected only after the QIP.
"That (government infusion through a preferential issue followed by the QIP) is the process we are going to follow this year and it will see us for the next two years," SBI Chairperson Arundhati Bhattacharya told the agency in an interview.
Post QIP, for which State Bank of India received shareholders nod earlier this week, government holding in the bank will go down to 58 per cent, she said.
"This will take the government stake to 58 percent. Thereafter, whether they will put money again and dilute again, whether they will dilute below 58 percent, I do not have any (answer)... It is for the government to decide," said Bhattacharya, who took over as the first woman chief of the state-owned lender in October.
She declined to comment on whether the bank will adopt the preferential allotment and QIP routes to remain adequately capitalised to meet the Basel III capital needs.
The government has promised to infuse Rs 2,000 crore through a preferential allotment of shares as part of its Rs 14,000 crore recapitalisation of the public sector banks this fiscal. It will be followed by a QIP issue of Rs 11,500 crore, which is slated to be completed by March.
Under the stricter Basel III capital requirement, SBI will need around Rs 2.3 trillion (Rs 2.3 lakh crore) in additional capital by March 2018 (when the Basel III norms are fully implemented). Of this, Rs 1.5 trillion is needed in core tier I capital, the bank's then CFO Diwakar Gupta had said last July.
While the money raised from the QIP, FPO and preferential issues will form the core tier I, or equity, capital, the bond sales strengthen the tier II capital. The bank had yesterday raised Rs 2,000 crore in domestic bond sale.
On its USD 10 billion medium-term notes programme, under which it plans to raise money by issuing bonds in global markets, Bhattacharya hinted that there may not be any activity this fiscal.
The bank had raised USD 800 million last February as part of this. So far, it has used only around USD 4 billion out of the USD 10 billion MTN mandate since 2010.
"We have not yet done anything (overseas bond sale) this fiscal but we will look at it after we have done the QIP," the Chairman said.
SBI counter was trading at Rs 1,717 down 1.46 per cent in a dull trade. The BSE 30-stock index, Sensex, was trading 80 points down at 1430 hours. The SBI scrip is down nearly 30 percent since last fiscal, 2012-13.
First Published: Friday, January 3, 2014, 15:20