SBI Invites Bids To Sell 1% Stake In National Stock Exchange

SBI’s NSE stake sale is part of its larger fundraising plan, which includes selling shares in UTI AMC and SBI Cards via IPOs.

People stand outside a State Bank of India (SBI) branch at night in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)
People stand outside a State Bank of India (SBI) branch at night in Bengaluru, India. (Photographer: Karen Dias/Bloomberg)

State Bank of India on Friday said it is looking to sell 50 lakh shares, equivalent to 1.01 percent stake, in National Stock Exchange as part of its fundraising exercise.

India largest public sector bank, at present, holds 5.19 percent stake in NSE.

"SBI is one of the shareholders of National Stock Exchange of India Ltd. and intends to divest up to 1.0101 percent (50,00,000 equity shares) of its equity shareholding in NSE through a competitive bidding process," the lender said in a public notice.

The bid should be submitted for a minimum lot of 10,00,000 shares in the prescribed format and the last date for submission is Jan. 15, 2020, it said.

In 2016, SBI sold 5 percent stake in NSE to Mauritius-based Veracity Investments for Rs 911 crore, valuing the exchange at over Rs 18,200 crore. After this transaction, the bank’s shareholding came down to 5.19 percent. Subsidiary SBI Capital continues to hold 4.33 percent stake in the exchange.

The recent exit of IFCI Ltd., formerly Industrial Finance Corporation of India, from NSE valued the country's largest stock exchange at around Rs 35,000 crore. It sold its entire 2.44 percent stake in the exchange for Rs 805.6 crore.

Besides the NSE stake sale, SBI is looking to raise funds via initial public offerings of UTI Asset Management Company and SBI Cards and Payment Services Ltd.

SBI Cards, the credit card arm of the lender, filed the draft red herring prospectus with the Securities and Exchange Board of India in November.

The company will offer up to 13,05,26,798 equity shares via offer for sale route. This will include up to 37,293,371 share sale by SBI and up to 93,233,427 shares on offer by Carlyle Group (CA Rover). In addition, the company will also issue fresh equity shares of Rs 500 crore.

Up to 18,64,669 shares have been reserved for employees of the company whereas 1,30,52,680 have been reserved for SBI shareholders.

SBI holds 76 percent in SBI Cards and rest of the stake is held by Carlyle Group.

On Friday, SBI shares fell 1.56 percent to Rs 334.00 apiece on the NSE while the benchmark Nifty 50 shed 0.45 percent to end the day at 12,226.65 points.