SBI goes aggressive on stocks

State Bank of India (SBI), the country’s largest bank, is aggressively scaling up its equity investments, for the first time since banks were allowed to invest in company shares over a decade ago. Till March 2007, the bank had invested a total of Rs 1,973 crore in shares of companies. In the nine months since then, it has added Rs 3,000 crore to its investment kitty, making investments of over Rs 100 crore in a clutch of blue-chip companies including GMR Infrastructure, Godrej Industries, Maruti Suzuki, Cairn India and DLF, besides closest rival ICICI Bank. Last year, the bank’s equity book had expanded by Rs 455.46 crore. “We have never looked at equity the way we are doing in the last one year or so. We are building (our investment portfolio) gradually and we intend to (continue to) do it,” said a senior SBI official. “There has been a shift in the financing of companies to a combination of debt and equity. If the bank has to have a relationship with the corporate, then it has to be in the debt and equity segment together. We are taking part in nearly all issues unless we feel the valuation is too high,” said the official.