SBI Mutual Fund listing off the focus, says chairman Dinesh Khara

The State Bank of India's (SBI's) planned initial public offering (IPO) for its mutual fund branch is now 'out of focus,' according to SBI Chairman Dinesh Khara, who made the announcement during a post-earnings media briefing on Friday.

SBI first revealed its intentions to take the mutual fund subsidiary public on December 15, 2021, with the aim of raising $1 billion.

SBI, which holds a 62.6 per cent share in SBI Mutual Fund, planned to sell a 6 per cent stake. Amundi Asset Management, a leading French insurer, which owns the remaining 36.8 per cent, had plans to sell 4 per cent of its holdings.

According to insiders, the lender will delay the mutual fund subsidiary's listing to increase its valuation. SBI is not in immediate need of raising funds, as the bank's capitalisation is sufficient.

SBI's Capital Adequacy Ratio (CAR) as at the end of the first quarter of the fiscal year 2024 had improved by 113 basis points year-on-year, standing at 14.56 per cent. According to the chairman, the bank's current capital level is sufficient to support another Rs 7 trillion in loan growth. As of June 30, 2023, SBI's loan book was valued at Rs 33 trillion.

Recently, Jio Financial Services, owned by Mukesh Ambani, announced a 50:50 joint venture with Blackrock to establish an asset management firm in India.

SBI has two other publicly traded subsidiaries: SBI Life and SBI Card. It also has three additional ones that could be monetised: the mutual fund arm, the general insurance vertical, and the investment banking arm, SBI Caps.

Had it gone through, the listing of SBI Mutual Fund or SBI Funds Management would have made it the fifth listed fund manager, following HDFC Asset Management Company, UTI Asset Management Company, Nippon Life India AMC, and Aditya Birla Sun Life AMC.