SBI may collect as much as Rs8,580-cr from bond sale
01 March 2011
Mumbai: The State Bank of India (SBI), India's largest bank and also a state-owned entity, may be due for a windfall having received more than 8.5 times the minimum subscription on offer for its bonds. Reports suggest that the final tally may be close to Rs8,580 crore, as against the Rs1,000 crore that was intended to be raised.
Though the bank aimed to raise Rs1,000 crore, with a greenshoe option for an equal amount, it had specified in its prospectus that it had the option to retain up to Rs10,000 crore if subscriptions from retail investors were more.
The bank, which is also India's largest lender, controlling about a quarter of all loans in India, is raising funds to meet its growth plans.
It is being given to understand that retail investors put in bids for Rs4,572 crore, which would be slightly more than half the amount which may have been finally collected.
The bank had offered 10-year bonds at 9.75% for retail investors, and 9.3% for non-retail applicants. The bonds carry a call option in the fifth year.
It also offered 15-year bonds at 9.95% to retail investors and 9.45% to non-retail investors. The bonds have call option in the tenth year.
SBI's previous public bond issue in October 2010, worth Rs500 crore, was similarly oversold, oversubscribed 20 times.