SBI Life shares will be on offer at ₹725 a piece on June 15

State Bank of India (SBI), the country's largest lender, will divest over 2 per cent stake for at least ₹1,522.50 crore in its subsidiary SBI Life to comply with the minimum public shareholding (MPS) norms, and will also decide on raising long-term fund up to USD 1.5 billion through bonds.

The decisions were taken at the meeting of the executive committee of the central board (ECCB) of SBI on Thursday.

"The executive committee of the central board of directors of State Bank of India approved the divestment of 2,10,00,000 equity shares constituting 2.1 per cent of our stake in SBI Life to adhere to minimum public shareholding of 25 per cent (remaining part of the bank's share for MPS) through offer for sale through stock exchange mechanism as per the regulatory prescription," SBI said in a regulatory filing.

SBI Life, in a separate exchange filing, said the floor price for the stake sale by the promoter, SBI, has been fixed at ₹725 per share.

The stake sale for non-retail investors will take place on Friday; and for retail investors and for non-retail investors who choose to carry forward their bids, on June 15, SBI Life said.

During the second quarter of the previous financial year 2019-20, SBI had sold a certain portion in SBI Life Insurance Company that helped it record a historic net profit during the year.

Besides, the bank's ECCB also approved to examine the status and decide on the USD 1.5 billion fundraising through bonds.

"The executive committee of the central board in its meeting held today, on June 11, 2020, inter alia approved to examine the status and decide on long-term fundraising in single or multiple tranches up to USD 1.5 billion," the bank said in the regulatory filing.

The public sector lender said the capital is proposed to be raised through public and/or private placement placement of senior unsecured notes in US dollar or any other convertible currency during FY 2020-21.

On June 4, SBI said it was considering to raise up to USD 1.5 billion (about ₹11,422.5 crore) through a public offer and/or private placement of bonds.

Earlier, in November, SBI raised ₹3,813.60 crore through perpetual bonds to fund its business growth.

Shares of SBI closed 5.64 per cent down at ₹177.20 a piece on the BSE.