The State Bank of India (SBI) is looking to list more subsidiaries this fiscal with its asset management arm likely to be picked first, thereby adding vigour to an IPO market that has seen entities such as Go Airlines (India) Ltd (GoAir), Aditya Birla Sunlife AMC, Zomato and CarTrade filing their draft papers with the market regulator.
SBI chairman Dinesh Khara in an interview to a television channel said that the “natural choice” in terms of offloading its stake this year will be SBI MF.
The SBI chief, however, added that as the proposal is yet to be placed before its board, he had no details to share.
He also indicated that the bank may list its general insurance subsidiary, though it is not immediately clear if it will happen in this fiscal as well.
SBI holds 70 per cent in the general insurer, which has posted a net profit of Rs 544 crore for the year ended March 31, 2021. Some of the other arms of SBI include SBI Capital Markets Group, SBI Payment Services and SBI SG Global Securities.
At present, SBI Life Insurance, in which the lender holds 55.5 per cent, and SBI Cards, in which it has a stake of 69.2 per cent, are listed on the bourses. The duo have a combined market cap of Rs 1.9 lakh crore.
SBI Funds Management (SBI MF) is the country’s largest fund house with assets under management (AUM) of over Rs 5 lakh crore.
The SBI has a stake of 62.88 per cent in SBI Funds Management with the rest being held by Amundi Asset Management of France.
It has posted a net profit of Rs 860 crore for the year ended March 31, 2021, a 43 per cent rise over Rs 603 crore reported in the previous year.
Earlier this year, Bloomberg had reported that the SBI may raise $1 billion from its IPO.
Shares of the SBI on Monday ended 2.73 per cent or Rs 10.95 higher as investors gave a thumbs-up to its fourth quarter results.
Analysts at Edelweiss Securities have retained their buy rating in SBI with a revised target price of Rs 600 of which the core bank is valued at Rs 414 and its subsidiaries at Rs 186.
A Motilal Oswal report has set a revised target price of Rs 530 of which the shares of its subsidiaries stands at Rs 187.
The likely offering from SBI MF comes at a time the IPO market is set for more activity after Rs 17,500 crore were raised in the first four months of this calendar year through the main board.
