SBI gets approval for buyout of SBICAPS stake in SVL for Rs 708 crore

The Executive Committee of the Central Board (ECCB) has authorized the acquisition by the State Bank of India (SBI) of the entire share held by SBI Capital Markets in SBICAP Ventures (SVL). The endorsement was given on July 4, 2023.

In order to buy the 6,03,80,000 equity shares or the whole stake now owned by SBICAPS in SVL, SBI had made a proposal. An estimated $708.07 crore will be spent on the proposed transaction.

SBI's share price increased by 3.80 or 0.65% to close at 589.20 on the BSE. The market value of SBI is around 5.26 lakh crore. A totally owned subsidiary is SBICAPs. Arm's length negotiations are to be used to complete the planned transaction. The purchase of SVL by SBI is being done to improve governance. 

All governmental approvals, including RBI, are required for the transaction. On November 10, 2005, SVL was established as a fully owned subsidiary of SBICAPS with the goal of conducting asset management and investment management advisor business, as well as to establish, help establish, provide, and/or participate in providing venture capital, technology funds, or any other funds for seed capital, risk capital foundation, loans, etc. The purchase of a 20% stake in SBI Pension Funds (SBIPFPL), which is currently owned by SBICAPS, was proposed by SBI last week on June 28. 

Currently, SBI, the holding company of SBIPFPL, owns 60% of the business. The transaction will cost approximately Rs. 229.52 crore.

Source: Media reports