ECCB grants SBI's request to buy SBI Capital's entire share in SBICAP Ventures

5 Jul 2023 , 01:26 PM

The Executive Committee of the Central Board (ECCB) has authorized the acquisition by State Bank of India (SBI) of the entire share owned by SBI Capital Markets in SBICAP Ventures (SVL). The endorsement was given on July 4, 2023.

In order to buy the 6,03,80,000 equity shares or the whole stake now owned by SBICAPS in SVL, SBI had made a proposal. An estimated Rs 708.07 crore will be spent on the proposed transaction.

SBI’s share price increased by 3.80 or 0.65% to close at 589.20 on the BSE. The market value of SBI is around 5.26 lakh crore.

Arm’s length negotiations are to be used to complete the planned transaction. The purchase of SVL by SBI is being done to improve governance.

All governmental approvals, including RBI, are required for the transaction.

After receiving all necessary regulatory permissions, the acquisition will be finalized, according to SBI.

On November 10, 2005, SVL was established as a fully owned subsidiary of SBICAPS with the goal of conducting asset management and investment management advisor business, as well as to establish, help establish, provide, and/or participate in providing venture capital, technology funds, or any other funds for seed capital, risk capital foundation, loans, etc.

In FY23, SVL’s asset under management (AUM) was 33,054 crore, up from FY22’s AUM of 26,811 crore.

Kameshwar Rao Kodavanti has been appointed Chief Financial Officer of SBI with effect from July 1, 2023. He has more than 31 years of banking expertise and has been employed by the State Bank of India since August 1991. He has extensive experience in the finance and accounting, forex, and banking industries.

The purchase of a 20% stake in SBI Pension Funds (SBIPFPL), which is currently owned by SBICAPS, was proposed by SBI last week on June 28. Currently, SBI, the holding company of SBIPFPL, owns 60% of the business. The transaction will cost approximately Rs 229.52 crore.

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