Government could be preparing for the mother of all public offers. Sources in the government have told NDTV that State Bank of India would go the equity route which would enable the bank to raise maximum capital at the cheapest possible cost.
Also keeping the success story of ICICI Bank''s Follow on Public Offer (FPO) in mind government is keen to push this option for SBI rather than allowing the bank to go for a rights issue. Government will now try to get the SBI Act Amendment Bill cleared in the monsoon session enabling it to reduce its stake to 51 per cent in the bank. SBI needs about Rs 1 lakh crore over 5 years and about Rs 20,000 crore in the current fiscal and the finance ministry is throwing its weight completely in favour of an FPO. Ministry sources say that at current prices the bank can easily raise around Rs 12,800 crore. To encourage retail participation SBI might split its stock to Rs 2 face value from Rs 10
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