SBI stock trades in green; funds management unit plans subsidiary in IFSC Gift City

Shares of State Bank of India (SBI) jumped nearly 1 percent in early trade on August 30. At 10:51am, the SBI stock was trading 0.40 percent higher at Rs 577.15 on NSE.

The funds management unit of the country’s largest public sector lender by market capitalisation has, meanwhile, announced plans to set up a subsidiary in IFSC Gift City, Gandhinagar.

The IFSC Gift City subsidiary 

The State Bank of India has shared its intention to set up a subsidiary through its unit, SBI Funds Management, in the IFSC Gift City in Gandhinagar. This proposal has gained approval from the higher authorities. However, its actual initiation is subject to obtaining the necessary regulatory clearances.

The plan involves creating an entirely new company in the IFSC Gift City premises. This particular location holds significance in financial matters. While the green light has been given to proceed, the final authorisation hinges on the adherence to regulatory protocols.

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SBI aims to explore fresh avenues in financial services and improve its offerings through this venture. While the initial endorsement has been secured, the full execution requires meeting the stipulated regulatory requirements. The move aligns with the broader trend of financial institutions exploring opportunities in the IFSC Gift City, Gandhinagar.

Also Read: SEBI should cut IPO timelines, allow brokers as underwriters: Raamdeo Agarwal

Brokerages bullish on SBI 

Brokerage firm Sharekhan gave a ‘buy’ rating to the SBI stock with a target price of Rs 710 in an August 4 report and said that the Q1 results of the bank were mixed but the outlook remained stable.

HDFC Securities has also assigned a ‘buy’ tag to the stock with a target price of Rs 750. “The management continues to remain optimistic on credit delivery through revamped buildout in SME, steady growth in retail and existing pipeline in corporate loans. However, with pressure on NIMs in a rising competitive environment and limited headroom on MCLR repricing, SBIN needs to ramp up other avenues of productivity (fee income and lower opex) in order to drive RoA reflation,” it said.

Prabhudas Lilladher has given the ‘buy’ rating to the State Bank of India with a target price of Rs 770 in an August 5 report. “Core profit after tax (PAT) miss of 2.8 percent led by lower net interest income (NII) due to softer loan growth. Asset quality was stable; strong balance sheet among PSU banks,” the brokerage house said.

LKP Research has given a ‘buy’ rating to the State Bank of India stock with a 12-month target price of Rs 743 in a report released on August 7, signifying a potential upside of more than 30 percent from the current market price. “The bank has delivered the highest ever quarterly profit; 15 percent credit growth in line with guidance for FY24,” it said.

Brokerage house Emkay global too gave a ‘buy’ rating to the State Bank stock with a target price of Rs 700 in a report released on August 5.

Stock performance

The State Bank of India stock has delivered a return of 10.03 percent over the last six months, while the benchmark Nifty Bank index has given a return of 10.49 percent over the same duration.

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