Mumbai, December 30: The country’s largest lender, State Bank of India (SBI), on Thursday said it plans to raise Rs 12,000 crore through bonds to fund its business growth.
The executive committee of the central board of the bank has accorded approval for raising the capital for an aggregate amount of Rs 10,000 crore by way of the issue of Tier II bonds, SBI informed the Bombay Stock Exchange.
The fund would be raised during the remaining period of 2010-11 and 2011-12 in different tranches, it said. Besides, the bank also plans to raise Rs 2,000 crore from bonds offered to retail investors. The board has also given approval for raising Rs 1,000 crore with a green shoe option.
This would have option to retain any amount of oversubscription under the retail category beyond Rs 2,000 crore but to the rates amount of Rs 10,000 crore, it said.
The first retail bond issue of Rs 1,000 crore by SBI was made in October which was subscribed over 17 times on the opening day itself. The bank had to curtail the subscription period as the response to the bonds was beyond anticipation.
The offering comprised issue of bonds worth Rs 500 crore, with an option to raise it further up to Rs 500 crore by issuing additional bonds. The bonds issued in two variants, Series 1 and Series 2 having maturity of 10 years and 15 years respectively, with a face value of Rs 10,000 each. The bonds offers an interest of 9.25 per cent for 10 years and 9.5 per cent for 15 years.
Source : The Economic Times