State Bank of India on Wednesday said it will explore possibilities to offload 6% of its stake in its mutual fund venture through the initial public offering route.
“…the Executive Committee of Central Board of the Bank has accorded approval for exploring possibilities to offload 6% stake of the Bank in SBI Funds Management Private Limited through IPO route, subject to receipt of all regulatory approvals,” it said in a statement to exchanges.
SBI currently holds 63% stake in SBI Funds Management, and the remaining stake is being held by Paris-based AMUNDI Asset Management through wholly owned subsidiary–Amundi India Holding.
Bloomberg had reported in February 2021 that the country’s largest bank is looking to raise $1 billion through this IPO. SBI’s mutual fund is currently valued at about $7 billion, it said.
While the timing of the IPO is not certain, the expectation is that the bank could be looking at a listing by the first quarter of next financial year.
SBI’s plan to list the mutual fund arm is part of its strategy to monetise its non-core operations after divesting some of its stakes in life insurance and cards businesses last year. SBI had raised over ₹10,340 crore through the listing of SBI Cards and ₹8400 crore through SBI Life IPO.
SBI’s mutual fund is the largest in India with ₹5 lakh crore of assets under management, according to its website. The fund house posted a net profit of ₹862.7 crore for the financial year ending March 2021, according to an investor presentation.
The SBI mutual fund business would also be the third such listing, joining UTI Asset Management Co. and HDFC Asset Management Co.
Source: Mint