SBI plans to pick up 20% stake in SBI Pension Funds; stock gains

6 Dec 2023 , 11:58 AM

State Bank of India’s shares rose 1% to Rs 614 in early trading on December 6 after the bank revealed its plan to purchase a 20% stake in SBI Pension Funds, which is presently owned by SBI Capital Markets.

SBI Pension Funds is 60% owned by the state-run banks. The transaction will increase its shareholding to 80%. The transaction, estimated at Rs 229.52 crore, will result in SBI owning the bulk of SBI Pension Funds, with SBI Funds Management owning the remaining 20%.

The country’s largest public sector lender stated in a regulatory announcement on December 5 that the planned transaction has been authorized by the RBI and the Pension Fund Regulatory and Development Authority (PFRDA).

The proposed deal is being undertaken on an ‘arm’s length basis,’ according to the announcement, and is based on a value study produced by Deloitte Touche Tohmatsu India. The planned deal is scheduled to close on December 15.

SBI and SBI Funds Management Ltd will serve as the fund’s sponsors. SBI Funds Management Ltd, a joint venture between SBI (62.53%) and Amundi (36.73%), owns 20% of SBI Pension Fund.

At around 11.54 AM, SBI was trading 0.19% higher at Rs 609.40, against the previous close of Rs 608.25 on NSE.

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