Sidbi to raise ₹10,000 crore from rights issue next fiscal to expand equity capital

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₹10,000-crore rights issue next fiscal to expand its equity capital as it expects to grow assets to ₹5 lakh crore by March 2024 from about ₹4 lakh crore in March 2023, PTI reported. The proposed rights issue will be carried out in two tranches of ₹5,000 crore each next fiscal to expand its capital base by ₹10,000 crore and support the growing balance sheet, which is expected to rise by a quarter from the present, the Sidbi chairman said. "We recently had moved the department of financial services seeking to raise capital.

Following this they moved the standing committee of Parliament which has suggested a capital support of ₹10,000 crore to us next fiscal so to provide us with more lending support to SMEs," PTI quoted Sivasubramanian Ramann as saying. On the rising direct lending level, the Sidbi chairman said the share of direct lending of the company is only 14% now, but the company expects the share of direct lending to grow to 25% over the next three years. "My objective is to take this to a quarter (25 per cent) of the total book over the next three years, said Raman who was with the capital markets regulator Sebi before joining Sidbi.

The share of company’s refinancing is still about 86%. Sidbi's capital adequacy ratio (CAR) came down to 19.29% in FY23 from 24.28% in FY22, according to the annual report which explained the fall to the effective capital utilisation to increase the portfolio of the bank. This again fell to 15.63% as of the June 2023 quarter.