VCCircle

This has to be the mother of all fund raising events. India's largest bank, State Bank of India, plans to raise about $12 billion or Rs 50,000 crore through a follow-on public issue, which is expected by end of the year. The funds thus raised will be used to expand not only in banking but also to invest in ventures such as insurance, private equity and wealth management, reports Reuters, quoting SBI's Chairman O.P. Bhatt from a press conference on Thursday.

Only last week, ICICI Bank, India's largest private sector bank and SBI's chief rival, raised about $5 billion from domestic and overseas markets. The domestic issue was oversubscribed 12 times, showing the investor appetite for banking stocks. It's not just ICICI Bank and SBI alone, the banks like HDFC Bank and UTI Bank are also planning share sales to capitalise their growth plans.

SBI plans to set up a holding company for all its subsidiaries - a la ICICI Bank - and list them.

Besides, SBI, which already has a life insurance joint venture, is planning an entry into general insurance, and is in the process of finalising a JV with a foreign partner. SBI has a JV in life insurance with Cardiff of France, and an asset management company JV with Societe Generale.

SBI, which has nearly 10,000 branches and 200,000 employees, and its subsidiaries control about 25 per cent of the domestic banking business.