Mumbai, Jan 23 (UNI) Calling its forthcoming rights issue a ''steal'', State Bank of India Chairman O P Bhatt today said that the volatility in the market would not affect the SBI's forthcoming rights issue.
''At a price of Rs 1600, it is a steal, and I am sure people will queue to buy it,'' Mr Bhatt said here today.
The Bank plans to garner Rs 167.36 billion from its long-awaited rights issue to the Government of India, eligible existing shareholders and global depository receipt (GDR) holders.
Stating that there were primarily two reasons behind the Bank declaring a 35 per cent discount for the existing investors, the SBI Chairman said the move was aimed at ensuring that in case of volatility in the market, there would still be a significant discount to attract the investors.
''Most of our investors are those who have invested with us for years together, and these are the people who need to be rewarded,'' he said.
The rights issue will be priced at Rs 1,590 per share, at a discount of around 35 per cent on its current share price, and the Bank would be able to raise capital without diluting the government stake in the Bank.
Meanwhile, responding to a query on the issue of merger of the State Bank of Saurashtra with the SBI, Mr Bhatt said that the ''restructuring'' was awaiting the Government's nod.
'' It can't take place unless there is the Government's approval. This is what the Act says. Whatever has to be done in this regard has already been done,'' he said.
He said approvals from the board of directors of the two banks and the Reserve Bank of India have already been received.
''After the approval from the Government, other technical nitty-gritties would be taken care of,'' he said. Mr Bhatt, however, said it was wrong to term the process as a ''merger'' and it was rather ''restructuring'' or ''reconstruction'' of the SBI.
UNI IAS MAZ SKB1552