SBI Plans to Divest 6.3% Stake in SBI Funds Management Limited Through IPO
State Bank of India (SBI) plans to sell a 6.3007% stake in its subsidiary SBI Funds Management Limited (SBIFML) through an IPO. The bank will divest 3,20,60,000 equity shares, while Amundi India Holding will sell 1,88,30,000 shares (3.7006% stake), totaling a 10.0013% stake for listing. SBIFML is India's largest asset management company with a 15.55% market share and ₹11.99 trillion in QAAUM. This IPO, subject to regulatory approvals, would make SBIFML SBI's third listed subsidiary after SBI Cards and SBI Life Insurance.
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State Bank of India (SBI), India's largest lender, has announced plans to sell a 6.3007% stake in its subsidiary SBI Funds Management Limited (SBIFML) through an Initial Public Offering (IPO). This strategic move, approved by the Executive Committee of the Central Board (ECCB) of SBI, marks a significant step in the bank's divestment strategy.
Key Details of the IPO
- SBI plans to divest 3,20,60,000 equity shares of SBIFML.
- Amundi India Holding, the other promoter, intends to sell 1,88,30,000 shares (3.7006% stake).
- Total stake planned for listing: 10.0013% (5,08,90,000 shares).
- The IPO is subject to regulatory approvals.
SBIFML: A Market Leader
SBIFML has established itself as a powerhouse in India's asset management industry:
- Largest asset management company in India with a 15.55% market share.
- Manages Quarterly Average Assets Under Management (QAAUM) of ₹11.99 trillion.
- Additional ₹16.32 trillion AUM in Alternates.
Strategic Importance
SBI Chairman Challa Sreenivasulu Setty highlighted the significance of this move:
- SBIFML would be SBI's third listed subsidiary after SBI Cards and SBI Life Insurance.
- The IPO aims to maximize value for existing stakeholders.
- It could create opportunities for general shareholders and broaden market participation.
Current Ownership Structure
| Stakeholder | Current Stake |
|---|---|
| SBI | 61.91% |
| Amundi India Holding | 36.36% |
Amundi's Perspective
Valérie Baudson, CEO of Amundi, commented on the IPO:
- Recognizes SBIFML's leadership in India's asset management industry.
- Acknowledges the partnership between SBI and Amundi.
- Views the IPO as an opportunity to unlock value in the Indian market.
Historical Context
- SBIFML was incorporated in 1992 as a wholly-owned subsidiary of SBI.
- It serves as the investment manager for SBI Mutual Funds.
- SBI Mutual Fund, established in 1987, was India's first non-UTI mutual fund.
This planned IPO represents a significant milestone for SBI and the Indian asset management industry. It not only reflects the growth and success of SBIFML but also could open up new avenues for public participation in one of India's leading asset management companies. As the process unfolds, market watchers will be keen to see how this move impacts SBI's overall strategy and the broader landscape of India's financial sector.
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