India's largest public sector bank, State Bank Of India (SBI), has approved a plan to raise its paid up capital by allotting fresh equity shares to the Government of India.
SBI will issue 21.7 crore additional equity shares at an issue price of Rs 269.6 per share on a preferential basis to the Indian government, the financial lender said in a stock exchange filing to raise Rs 5,681 crore.
The preferential allotment will not have a major effect on the government's shareholding in SBI which will go up from 61.1 percent from 61.23 percent.
The decision is part of the government's planned capital infusion of Rs 22,915 crore in the public sector bank, which was announced on July 19, 2016. State Bank of India was expected to receive Rs 7,575 crore capital from the government's first tranche of capital infusion.
According to the plan for the capital infusion, 75 percent of the amount was to be first released to provide liquidity support for lending operations. The remaining amount which will be released later is linked to performance of the banks.
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