SBI Board to Meet for Fundraising of Rs 25,000 crore

Shares of the country’s largest lender, State Bank of India (SBI), plunged 14.5% on Tuesday due on the back of high volumes. About 12.24 crore shares changed hands on NSE, marking the highest single-day volume in almost three years.

On Wednesday, the stock marginally recovered from the previous session’s fall, trading higher by 2%. The stock rebounded over 6% from the day’s low of Rs 744.05 and is currently trading above its opening level of Rs 790.75 on the NSE.  

Despite the recovery, the stock is seen as underperforming compared to the Nifty Bank and Nifty PSU Bank indices. The Nifty Bank index rose by 4.75%, while Nifty PSU Bank was up by 3.14% on Wednesday.

Fundraising Proposal

SBI recently announced that its board will consider a proposal for a long-term fundraising of USD 3 billion (about Rs 25,000 crore). According to a press release, the Executive Committee of the Central Board will meet on June 11, 2024, to consider a proposal for long-term fundraising to the tune of USD 3 billion.

Details of the Fundraise

The fundraising will involve issuing senior unsecured notes in US dollars or any other major foreign currency through public offer or private placement. This will be done in single or multiple tranches during FY 2024-25.

Stock Performance

Despite the 14.5% fall on Tuesday, SBI shares are up by 25% in 2024. The shares of SBI fell on Tuesday amid a fractured mandate in the 2024 Lok Sabha elections, which surprised the market.  The BJP had secured an absolute majority in 2014 and 2019, which had boosted PSU stocks, especially during the second term of the BJP-led NDA government.  

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.