SBI Mutual Fund's $1-Billion IPO Plan Shelved For Now, Confirms SBI Chairman

SBI Chairman Dinesh Kumar Khara, who confirmed that the planned share sale of its mutual fund subsidiary has been shelved for the time being, didn't divulge any reasons for the delay

In February, SBI Mutual Fund, with around Rs 6.5 lakh crore in asset under management (AUM), finalised seven merchant bankers for a $1-billion IPO.

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SBI Mutual Fund, the country's largest asset manager, has shelved its plan for share sale for now.  State Bank of India Chairman Dinesh Kumar Khara on Wednesday confirmed that the planned share sale of the bank's mutual fund subsidiary has been shelved for the time being.

In February, the asset manager with around Rs 6.5 lakh crore in asset under management (AUM) finalised seven merchant bankers for a $1-billion IPO. However, the markets soon became volatile following the Russian invasion of Ukraine that month.

"There is no plan to list SBI Mutual Fund for now," Khara said, while talking on the sidelines of the national banking summit, reported PTI. The SBI chief didn’t reveal any reason for the delay but confirmed that the IPO plan stands shelved for now.

It all started on December 15, 2021, after SBI announced plans to offload a 6 per cent stake in SBI MF through an IPO. The bank said it was aiming to raise around $1 billion through the IPO. SBI has a 62.6 per cent stake in SBI Mutual Fund, while the remaining 36.8 per cent is hold by the leading French insurer Amundi Asset Management which was aiming to offload 4 per cent of its holding.

Initially, Amundi's holding was held by Societe Generale Asset Management, a subsidiary of Societe Generale of France which was transferred to Amundi in June 2011. SBI had reportedly selected seven i-bankers -- BofA Securities, Citi, HSBC Securities, Axis Capital, Kotak Capital, SBI Caps ,and BNP Paribas -- for the share sale.

The other two other publicly traded subsidiaries of SBI include SBI Life and SBI Card, including three more which can be monetised such as the mutual fund arm, general insurance vertical and the investment banking arm, SBI Caps.

Meanwhile, the SBI chairman said credit demand, which has hit an eight-year high of 18 per cent last week, is coming in from across sectors, including SME corporates, retail and agriculture and that credit growth is a clear reflection that the economy is on a rebound.

"There is a healthy demand in the housing sector despite rising rates. Higher rates have not deterred demand," Khare said, adding, he expects credit growth to be moderate going forward but will remain healthy overall to about 15-16 per cent after festive pickup normalises.