SBI mulls offloading 6% stake in mutual fund venture via IPO

The State Bank of India (SBI) plans to explore possibilities to offload 6 per cent of its stake in its mutual fund venture through an IPO.

“…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,” SBI stated to exchanges on Wednesday.

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 the next fiscal, a report in Mint said.

The bank currently holds 63 per cent stake in SBI Funds Management, and the rest is held by Paris-based AMUNDI Asset Management through wholly-owned subsidiary Amundi India Holding.

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The SBI mutual fund business would be the third such listing, joining UTI Asset Management Co. and HDFC Asset Management Co.

According to a Bloomberg report of February 2021, the country’s largest bank was looking to raise $1 billion through the IPO, with SBI’s mutual fund valued at about $7 billion.

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 more than Rs 10,340 crore through the listing of SBI Cards and Rs 8,400 crore through SBI Life IPO, the Mint report said.

The SBI website states that its mutual fund is the largest in India with Rs 5 lakh crore of assets under management.