State Bank of India sees launch of $4.4bln rights issue soon

Government needs to subscribe big to maintain its stakeholding at the existing level.

State Bank of India, which is expecting government approval for its nearly Rs 20,000 crore (US$4.4 billion) rights issue "anytime soon", plans to launch a euro bond issue, its chairman Om Prakash Bhatt said here last Friday.

"We are expecting to raise a benchmark-size five-year euro bond as we've a significant pipeline of existing customers who require the euros," Bhatt told newsmen after launching a certificate course on customer service and banking codes and standards by the India Institute of Banking & Finance, of which he is the president.

The SBI offer will be the first large euro issue from the country after ICICI Bank had raised 500 million euro bonds in the March 2007.

The SBI is also working on a rights issue on Thursday, banking secretary R Gopalan said the government would take a call within a fortnight on whether SBI should be allowed to go for the rights issue, which is expected to be in the range of Rs 18,000-21,000 crore.

"We are number-crunching that (SBI proposal of Rs 20,000 crore rights issue) now. I think some decision would be taken perhaps in next 15 days," Gopalan said in Delhi on Thursday.

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