SBI to acquire 100% stake of SBI Capital in SBICAP Ventures for Rs 708.07 crore

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The State Bank of India (SBI) has received approval from its Executive Committee of the Central Board (ECCB) to acquire the entire stake held by SBI Capital Markets in SBICAP Ventures (SVL). The approval was granted on July 4, 2023. SBI intends to acquire a 100% stake, which comprises 6,03,80,000 equity shares, currently held by SBICAPS in SVL.

The estimated cost of the proposed transaction is ₹708.07 crore. Following the announcement, SBI’s share price on the BSE closed at ₹589.20 apiece, reflecting an increase of ₹3.80 or 0.65%. SBI’s market value is approximately ₹5.26 lakh crore.

SBICAPs is a wholly-owned subsidiary of SBI. The acquisition of SVL by SBI will be conducted on an arm’s length basis, with the objective of improving governance. The completion of the deal is contingent upon obtaining all necessary regulatory approvals, including from the Reserve Bank of India (RBI).

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SBI stated, “The acquisition will be completed after receipt of all regulatory approvals.”

SVL, which was established as a wholly-owned subsidiary of SBICAPS on November 10, 2005, focuses on asset management, investment management advisory services, and the provision of venture capital, technology funds, and other funds for seed capital, risk capital foundation, loans, and more.

As of FY23, SVL’s assets under management (AUM) amounted to ₹33,054 crore, compared to ₹26,811 crore in FY22.

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In addition, Kameshwar Rao Kodavanti assumed the position of Chief Financial Officer at SBI on July 1, 2023. Having been associated with the State Bank of India since August 1991, he possesses over 31 years of experience in banking, with expertise in areas such as banking, forex, finance, and accounting. Last week, on June 28, SBI proposed the acquisition of a 20% stake in SBI Pension Funds (SBIPFPL), which is currently held by SBICAPS. Currently, SBI, as the holding company, holds a 60% stake in SBIPFPL. The estimated cost of the transaction is ₹229.52 crore.

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