SBI to Launch Wholly-Owned Subsidiary for Corporate Debt Market Development Fund

19 Jul 2023 , 01:48 PM

State Bank of India (SBI) has announced its plans to set up a new trustee company as a wholly-owned subsidiary to manage the Corporate Debt Market Development Fund (CDMDF).

The CDMDF will function as a backstop facility, facilitating the purchase of investment-grade corporate debt securities. Its primary objectives are to instill confidence among participants in the corporate bond market during times of stress and to enhance secondary market liquidity by creating a permanent institutional framework for activation during market downturns.

SBI Funds Management Ltd (SBIFML), the asset management company (AMC) of SBI Mutual Fund, has been selected as the investment manager-cum-sponsor for the CDMDF. SBI currently holds a 62.53% stake in SBIFML.

The establishment of the CDMDF will classify it as an Alternative Investment Fund (AIF) under the SEBI (Alternative Investment Funds) Regulations, 2012. However, the launch of the fund is subject to obtaining all necessary regulatory approvals.

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