India's biggest lender by assets, State Bank of India, could tap capital markets next fiscal year to raise up to $1.5 billion, its chief said on Friday, though it first needs to complete a planned merger with its subsidiary banks.
In an interview with Reuters on the sidelines of the World Economic Forum in Davos, Arundhati Bhattacharya also said the lender would look to raise funds from stake sales in its life insurance unit that could list in a year to 18 months, and by paring its holding in UTI Asset Management Co, which is also looking to go public.
“We do plan to raise some capital. However, this is also dependent on the fact that there is a merger that we are planning to do,” said Ms. Bhattacharya, 60, who has been at the helm of SBI as its chairman since late 2013.
SBI, which is merging its five subsidiary banks with itself and also taking over a small state-run lender for women, previously expected the merger to be completed by March.
The deals could now get delayed by a quarter, Ms. Bhattacharya said, as banks are still busy replacing withdrawn banknotes after India’s sudden move in November to cancel 86% of its currency. India's fiscal year starts in April.
“As long as the merger is not over and done with, it could be difficult to approach the capital markets,” Ms. Bhattacharya said, adding the lender could look to raise between $1 billion and $1.5 billion from the markets.
SBI last sold shares in January 2014 to raise $1.2 billion.
