Being an Indian, we have all heard of SBI at least once in our lifetime and in the best predictability, we have at least one bank account with the nation’s largest lender. SBI which is an acronym for the State Bank of India is an entity completely run and managed by the Government and is a conglomeration of various different financial institutions.
Onwards from 2016, SBI has been on a run to acquire and merge various of its subsidiaries like State Bank of Mysore, Hyderabad etc. and even merged with financial institutions outside of its brand name. But this year in 2019, SBI announced a sale of its stocks for around 1.4 billion USD for its holdings in various financial institutions.
In this strategic move by the country’s largest lender, SBI has chosen underwriters whose sale can raise as much as 1.4 billion USD. As of now, the official announcement for this deal has only been made public on the official PR release by the bank. In its statement, SBI announced that it has chosen Bank of America Corp., CLSA Ltd. and HSBC Holdings Plc as the main organizers of the sale. Other financial institutions that were chosen include Kotak Mahindra Bank Ltd. and SBI Capital Markets Ltd. which have been chosen to work on this massive deal.
Market experts from around India are predicting that this move is an attempt to bolster SBI’s capital buffers as it plans to churn out loans at a faster pace in the upcoming years. If we take a close at the credit market, it is easy to understand that it has been growing at the fastest pace since the past 5 years, after a slight recession to shadow money lenders.
Once the sale goes through, it is set to add 11.5 Billion USD into the Indian economy as per the data gathered by Bloomberg India. As of now, the finer details of the sale have not been made public and the fundraising target could change in the upcoming days.