State Bank of Travancore seeks Sebi nod to raise Rs 485 crore via rights issue

NEW DELHI: State Bank of Travancore has sought capital markets regulator Sebi's approval to raise up to Rs 485 crore through rights issue to shore up its capital base.

In rights issue, shares are issued to existing investors based on their holdings at a pre-determined price and ratio.

The bank would issue equity shares for an aggregate amount of up to Rs 485 crore on a rights basis to its shareholders, as per a draft letter filed by the lending body with Securities and Exchange Board of India (Sebi).

State Bank of Travancore is a subsidiary of country's largest lender State Bank of India (SBI).

The bank intends to utilise the net proceeds towards augmenting capital base to meet its capital requirements, primarily loan and investment portfolio.

The issue is being managed by BOB Capital Markets Ltd and SBI Capital Markets.

In June, the board of State Bank of Travancore had approved raising funds through a rights issue.

The bank registered a net profit of Rs 304.34 crore in Financial year 2013-14 as compared to Rs 615.04 crore in the preceding year. The drop in net profit is attributed to sharp rise in NPAs (Non-Performing Assets).

As of March 31, 2014, the bank had gross NPAs of Rs 3,076.94 crore as against Rs 1,749.88 crore in the year-ago period.