SBI declined on Friday on selling pressure, following reports that there was no move to increase the limit for FIIs in the state-run bank from the current 20%.

Immediately after the start of trading on the BSE, the scrip of India's largest commercial bank slipped by 1.81% to Rs 300.85 by 10:12 IST. A total of 260,000 shares changed hands on the counter. On Thursday, the scrip ended higher by 4.41% at Rs 306.40. It, however, slipped from the 52-week high of Rs 308.40. A huge volume of over 3.17 million shares was recorded on the counter.

The offloading of the SBI stock was purely on the denial by the government that it has no intention of raising the investment limit for foreign institutional investors. On Thursday, the stock rose purely on rumours that the government may relax the ceiling for FIIs in the state-run bank.

However, dealers said the stock may not lose major ground as there were hopes that the limit for FIIs may be relaxed soon.

On Thursday, almost all major players - institutions, retail investors and operators - participated in the SBI rally. Currently, there is a cap of 20% for FIIs in SBI. The Global Depository Receipt holding also comes under the overall ceiling of 20% for FIIs in the bank. At present, the limit for FIIs stands exhausted as they hold a 19.63% stake in SBI (as per the shareholding pattern of the bank on 31 December 2002). The holding of FIIs in SBI includes the 7.88% holding of GDR holders.

Analysts said the short-term trigger for the SBI stock was rumours of the hike in limit for FIIs, and with the government denying any such move, players booked profit in the stock.

For Q3 ended 31 December 2002, SBI recorded a 28% growth in net profit to Rs 787.05 crore (Rs 7.87 billion). Net revenues grew by 18% to Rs 3,756.93 crore (Rs 37.56 billion). For the nine months ended 31 December 2002, net interest income recorded a 7% rise to Rs 7,210.20 crore (Rs 72.1 billion), mainly due to an increase in interest income by 4% to Rs 23,066.35 crore (Rs 230.66 billion). Net profit stood at Rs 2367.45 crore (Rs 23.67 billion), up 30%.

BSE Code: 500112