Hindustan Times (Lucknow)

SBI begins sale of non-core assets to expand capital base

- Alekh Archana alekh.a@livemint.com

MUMBAI: State Bank of India (SBI) has started the process for selling some of its stake in some of its strategic investment­s which are not critical to its core business in an attempt to shore up its capital base, two people aware of the developmen­t said.

SBI has stakes in stock exchanges, depositori­es, clearing and warehousin­g corporatio­ns, and credit rating agencies.

As a first step, the bank plans to hire a merchant banker to assist in the process.

In June, SBI raised ₹15,000 crore through a qualified institutio­nal placement (or sales to financial institutio­ns), which saw its capital adequacy ratio (a measure that looks at a bank’s capital in proportion to its loans, accounting for risk) increasing to 13.31% as on June 30.

Once a merchant banker is on board, we will look at which assets we can monetise, whether fully or partially. Since these are not fire sales, we want to have some kind of a timetable. From November, we should be able to go to the market,” said the first person, a SBI executive, on condition of anonymity.

A spokespers­on for SBI said that as mentioned by the bank’s chairman Arundhati Bhattachar­ya “on various platforms”, SBI would exit, wholly or partially, its investment­s in “noncore assets”. “There is a plan in place and we would do the transactio­n at an appropriat­e time. However we would not like to comment on an individual company or transactio­n.”

SBI is divesting 8% in joint venture SBI Life Insurance Company Ltd’s IPO, which opened for subscripti­on on Wednesday.

SBI held 5.19% in the National Stock Exchange Ltd and had 3.52% in Metropolit­an Stock Exchange of India Ltd at the end of June. In July 2016, SBI sold a 5% shareholdi­ng in NSE for ₹911 crore. SBI is also a shareholde­r in SMERA Ratings Ltd, which is promoted by the Small Industries Developmen­t Bank of India.

The country’s largest lender also holds 21.20% in Clearing Corporatio­n of India Ltd (CCIL), according to the latest annual reports of these companies.

 ?? MINT/FILE ?? SBI has stakes in stock exchanges, depositori­es, clearing and warehousin­g corporatio­ns, and credit rating agencies.
MINT/FILE SBI has stakes in stock exchanges, depositori­es, clearing and warehousin­g corporatio­ns, and credit rating agencies.

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