Govt to decide on SBI Rs 20K crore rights issue
The government on Monday said it will decide on the proposed Rs 20,000 crore rights issue of State Bank of India (SBI), the country’s largest lender.india Updated: Nov 11, 2010 21:45 IST
The government on Monday said it will decide on the proposed Rs 20,000 crore rights issue of State Bank of India (SBI), the country’s largest lender.
“We are number crunching that (SBI proposal of R20,000 crore rights issue) at this point of time.” said R Gopalan, financial services secretary on the sidelines conference organised by consulting firm Skoch here on Thursday.
“I think some decision would be taken perhaps in next 15 days,” he said.
A rights issue is a way in which a company raises additional capital by selling new shares. Shares are offered to existing shareholders in proportion to their current shareholding in respect for their rights.
Shares are usually sold at a discount giving the existing shareholders the incentive to buy the new shares. If they do not subscribe to the issue, the value of their holding is diluted.
The government holds about 59% stake in State Bank of India.
“I expect the approvals from the government to come this month and the issue will definitely come out this fiscal,” said O P Bhatt, Chairman, SBI, in Mumbai.