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January 14, 2008 14:52 IST
State Bank of India [Get Quote] on decided on Monday to raise Rs 16,736.31 crore (Rs 167.36 billion) from its much-awaited rights issue, which will be priced at Rs 1,590 a share.
According to a decision of the bank's central board in Mumbai, existing shareholders would be given a share for every five shares.
The price at which shares would be offered represents about 36 per cent of discount to State Bank of India's current share price.
This means shareholders would get a share at a premium of Rs 1,580, if face value of Rs 10 is considered, but at a discount of Rs 889, if today's current price at Rs Rs 2,469 on the Bombay Stock Exchange is taken into account.
For the rights issue, the Bank also decided to raise its issued capital to Rs 650 crore from the existing Rs 526.30 crore (Rs 5.26 billion).
The bank would also issue shares to employees under Employees Stock Purchase Scheme, SBI said in a filing to BSE.
The decision of the SBI's board came one-and-a-half months after the Union Cabinet gave nod to the rights issue.
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