The State Bank of India is weighing a plan to take control of its investment-banking joint venture (JV) with Investec India, according to two people familiar with the matter. The move comes as India’s largest lender seeks to strengthen its deal-making and distribution capabilities in the midst of a multi-year boom in the country’s equity capital markets.
SBI is considering raising its stake to 51% from about 20% after an earlier attempt to raise the stake to 40% was rebuffed by the Reserve Bank of India (RBI) a couple of years ago, the first person cited above said on condition of anonymity.
“The regulator usually wants bank stakes in other businesses to be at 20% or below, or at 51%,” this person said. “This is to ensure that once the bank has a majority stake, it can exercise greater control and the entity can come under the consolidated supervision of RBI.”
SBI’s 20% stake in Investec Capital Services (India) Pvt Ltd is held through its subsidiary SBI Capital Markets (SBI Caps), and dates back to 2020.
The remaining 80% stake is held by Investec India Holdco Ltd (IIHL). The holding company is a subsidiary of Investec Investments (UK) Ltd, which, in turn, is a subsidiary of Investec Bank Plc.
Investec Capital Services (India) provides services across private credit, mergers and acquisitions, and equity and debt capital markets. It also has an institutional equities business and said in its annual report for FY25 that it was able to on-board new clients—domestic and overseas—which has helped it grow the business.
“While SBI Caps has been originating a lot of deals, this partnership has helped distribute it and get more investors on board,” said the person cited above.
The second person cited earlier said that no proposal has been moved to the board of the JV and there is no formal application made to the RBI yet. Once decided internally, SBI is expected to approach the regulator with a fresh proposal.
The first person added that SBI will not look to raise the stake to 100% since the JV has performed well in the current structure and the presence of Investec has helped. The idea now is to get a bigger say and that would only be possible with a majority stake under the current regulations.
“The bank never wants to exit JVs unless the other side themselves plan to,” said the first person.
Emails sent to SBI, SBI Caps and Investec Capital Services remained unanswered till press time.
Analysts are upbeat about the business prospects of Investec Capital Services. Analysts at Crisil Rating on 5 February reaffirmed its rating on the long-term bank credit line at AAA.
Crisil said that the rating also factors in Investec India’s adequate capitalization for the current and planned scale of operations, and the company’s experienced management team.
“SBICAPS also views the JV as an important vehicle for its ECM (equity capital markets) segment and is involved both at the board level as well as in the daily functioning of the ECM business. Both the partners act in concert on strategic and key operational decisions,” said Crisil in a report dated 5 February.
“In the equity capital markets, the company successfully closed and completed 19 ECM transactions in partnership with SBI Capital Markets Ltd. In corporate finance, the company continues to win mandates across the sectors of healthcare, consumer, technology, industrials,” it said.
Investec Capital Services reported a net profit of ₹119 crore in FY25, on the back of ₹453 crore in revenues. In the previous financial year, the company’s profit was at ₹71 crore, while revenues were at ₹293 crore.
The company has been listed as SBI’s associate company in its annual report. As of 31 March 2025, SBI had 27 subsidiaries, eight JVs, and 18 associates.
Investec Capital Services’ articles of association has provision for SBI Caps to raise its stake. As per the articles, SBI Caps has the right to offer to buy more shares from Investec India HoldCo Ltd to raise its stake anywhere between 51% and 60%. This provision was specifically applicable within a year from the expiry of the so-called lock-in period, which ended in January 2024. It could not be immediately ascertained whether this was still applicable.
“SBI Caps shall have the right to issue a notice to the company to require the company to commission the computation of the fair market value. Upon receipt of the fair market value computation, SBI Caps shall have the right to issue a notice in writing to IIHC setting out the number of equity shares proposed to be purchased and the fair market value by the Big Four Auditing Firm,” as per the articles of association cited above.
It specifies that after the offer is made, IIHC shall be under an obligation to sell and SBI Caps shall be under an obligation to purchase the majority shares within 30 business days.
