SBI gains on nod to acquire SBICAP Ventures

State Bank of India shares gained a marginal 0.5 percent in early trade on July 05 after the Executive Committee of the Central Board (ECCB) approved its acquisition of the entire stake held by SBI Capital Markets in SBICAP Ventures (SVL).

The largest public sector bank had proposed to buy a 100 percent stake worth Rs 708 crore currently held by SBI Capital Markets. SBICAP is a wholly-owned subsidiary of the bank.

At 11:15 am, SBI shares were quoting at Rs 592, up 0.4 percent from the previous day’s close on the National Stock Exchange. The stock has gained more than 5 percent in the last five days.

Follow our market blog for all the live action

According to a disclosure on stock exchanges, SBI said that the transaction will be conducted on an arms-length basis. The rationale behind the acquisition, the bank said, is better governance and will require a nod from the Reserve Bank of India (RBI).

SVL was established as a wholly owned subsidiary of SBICAPS on November 10, 2005. Its main objectives are to conduct asset management and investment advisory services. Additionally, SVL aims to support the establishment and provision of various funds, including venture capital and technology funds, as well as offering seed capital, risk capital foundation, and loan services.

The move gains significance as this is the second time in quick succession that the SBI has received ECCB approval. In late June, the board gave the green light to acquire a 20 percent stake in SBI Pension Funds, the largest in the country with around 37 percent market share as of May 2023.

S&P also upgraded its rating for SBI’s standalone credit profiles which reflects lower credit risk and improving earnings.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.???