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SBI hopes RIBs will net $ 1 bn from Gulf states

State Bank of India chairman M S Verma says the bank hoped to raise between $ 600 million and $ 1 billion from the Gulf states or the Middle East through the Resurgent India Bonds that will open for subscription on August 5.

In all, SBI is looking at a total subscription of around $ 2 billion from all over the world for the bonds.

Verma and other top SBI officials are on a Gulf tour for the roadshows for the issue. They were in Dubai on Saturday and made a presentation in Abu Dhabi on Sunday.

SBI teams will also travel to Kuwait, Bahrain and Oman for similar roadshows in the coming days, Verma said.

Roadshows are also planned in Germany, the United Kingdom, Switzerland, South Africa and Australia, he said.

Verma said the Securities and Exchange Commission, the regulatory body in the United States for capital markets, was expected to take a stand on the RIBs on July 30.

The decision was expected on Friday, but the SEC postponed it by a few days, he said.

If the SEC takes a favourable view, SBI will also hold roadshows for the issue in the US, he said.

"SBI has chalked out an aggressive marketing strategy -- including roadshows at important non-resident Indian centres -- to mobilise subscriptions from NRIs all over the world," he said.

Verma said the bonds had attracted a lot of interest among NRIs and overseas corporate bodies all over the world.

"This is an opportunity for them to participate in the process of growth and development in India," the SBI chairman said.

"India is today a nation on the march. We strongly believe that, in the next ten years, India will emerge as one of the strongest economies in the world. It will be the fourth or fifth largest economy," he said.

He said India was progressing at an exciting pace. "There is a lot of work being done, especially in the infrastructure sector. The changes now are very perceptible and fast," he said.

According to him, the expenditure on infrastructure projects would increase greatly in the coming years. "The money raised through the RIBs will substantially go towards infrastructure projects," he said.

The bonds are being offered in three currencies, US dollar (with a coupon rate of 7.75 per cent), pound sterling (8 per cent)and deutsche mark (6.25 per cent).

The issue is scheduled to close on September 4, but SBI has retained the option to close the offer any time after August 17.

NRIs, OCBs and banks acting in a fiduciary capacity on behalf of NRIs or OCBs can invest in these bonds, which have a tenure of five years.

Both the principal invested and the interest earned are fully repatriable by NRIs.

UNI