SBI to sell up to 49% in i-banking arm SBI Caps

MUMBAI: State Bank of India is selling a stake of up to 49% in its investment banking subsidiary SBI Capital Markets (SBI Caps) and is looking for a joint venture partner. The stake sale is part of a Rs 20,000-crore capital-raising exercise by the lender for FY19 to fund growth.
SBI chairman Rajnish Kumar said, “This year, we will be looking at bringing in a partner for SBI Caps. We will be shedding 24-49% stake.” He added that the bank is also looking to sell 3-5% in SBI General Insurance in FY18, and selling a stake in SBI Card in FY20.

SBI is in the process of merging the project advisory businesses of SBI Caps with the bank. According to Kumar, there was a bit of duplication with SBI’s own advisory business and, hence, the decision to merge the two. “We are looking at SBI Caps as a pure investment bank,” Kumar said.

In FY18, SBI had got its subsidiary SBI Life listed through an offer for sale of its own shares. “All our subsidiaries have done exceedingly well. They hold large value, which is waiting to be unlocked. We have plans to unlock that potential in the current as well as in the next year,” Kumar said.

SBI Caps had reported a net profit of Rs 327 crore for FY18, up 30% from Rs 252 crore in FY17. The investment bank has five wholly owned subsidiaries — SBICAP Securities, SBICAP Trustee Co, SBICAP (UK), SBICAP (Singapore), and SBICAP Ventures. SBI Caps is the largest domestic investment bank, offering all investment banking and corporate advisory services. These services include project advisory and loan syndication, structured debt placement, capital markets, mergers & acquisitions, private equity and stressed assets resolution.