State Bank of India rallies over 1% on fund raising plans

NEW DELHI: State Bank of India (SBI) rallied as much as 1.6 per cent in trade on Wednesday, after the largest public sector bank launched mega share sale through qualified institutional placement (QIP) route, which is aimed at raising up to Rs 9,500 crore, on Tuesday.

At 09:20 a.m.; SBI pared some of the morning gains and was trading 0.5 per cent higher at Rs 1604. It hit a low of Rs 1601.90 and a high of Rs 1621.90 in trade today.

Though the exchange filing from the state-run bank did not mention the amount it plans to raise, the country's largest lender has a mandate from board and shareholders to raise up to Rs 9,500 crore by issuing shares to qualified institutional investors, Reuters reported.

The QIP issue is expected to be followed by Rs 2,000-crore fund infusion to the bank from the government, added the report. Post-QIP, for which SBI received shareholder nod a few days ago, government holding in the bank will go down to 58 per cent.