State Bank of India, India's largest and biggest public sector lender, on Wednesday said it will explore possibilities to offload 6% of its stake in its mutual fund subsidiary SBI Funds Management through the initial public offering (IPO) 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 the exchanges.
Currently, SBI holds 63% stake in SBI Funds Management, which is a joint venture between SBI and France-based AMUNDI Asset Management through wholly-owned subsidiary--Amundi India Holding, which holds the remaining 37% stake.
In February this year, Bloomberg had reported that SBI is looking to raise $1 billion through this IPO. The SBI asset manager is currently valued at about $7 billion, it said.
SBI has been mulling to list its mutual fund arm for several years as part of its strategy to monetise its non-core assets. It has already divested some stake in life insurance and cards businesses in the past years. SBI had raised over Rs 10,340 crore through the listing of SBI Cards, and Rs 8,400 crore through SBI Life Insurance IPO.
SBI’s mutual fund is the largest in India, with Rs 5 lakh crore of assets under management (AUM), according to its website. It reported a net profit of Rs 862.7 crore for the financial year ending March 2021.
In 2018, company was raising capital for a new alternative investment fund (AIF) to invest in companies with distressed balance sheets.
