IPOs from PSU bank subsidiaries including SBI, Canara Bank can rain on D Street
The IPO market is already buzzing with a lot of activity. Reports state as much as $2.4 billion could be mopped up through new issues in July. PRIME Database figures suggest that as many as 143 IPOs in different stages of planning that could raise a total of $26 billion and 73 have been cleared by SEBI.
Kolkata: The IPO market is already alive with the rustle of oversubscription. A lot more could be in the offing as the Centre has urged public sector banks to fast track listing of their subsidiaries and joint ventures. Reports state that as many as 15 such businesses are being prepared for public issues and/or strategic divestment. The government's advice to the banks came on Sunday, June 29.
Among the banks are top lenders such as State Bank of India, the largest bank in the country and Canara Bank. The Union finance ministry is of the opinion that the act of listing of these entities will not only unlock value for the banks but also improve governance and increase returns on state-owned capital. After a correction, the Indian equity markets seem to be back in a rising momentum.
SBI General Insurance and SBI Payment Services
The banking industry is passing through the pink of its health, one of the key indicators being robust asset quality. According to reports, SBI General Insurance and SBI Payment Services, could be on the list of businesses that SBI could be considering for listing. SBI General Insurance Company is a 16 year old business. It was set up in February 2009. The company notched up a net profit of Rs 509 crore in the last financial year (FY25). SBI has a stake of 68.99% in SBI General Insurance.
Another SBI subsidiary SBI Payment Services is in the business of merchant acquiring operations. It is a joint venture between SBI and Hitachi Payment Services, with the former having 74% of stake in the firm. It facilitates digital payments for businesses through various channels like POS terminals, QR codes, and app-based solutions. In FY24, SBI Payments had over 33.10 lakh merchant payment acceptance touchpoints and it was one of the biggest in this business, said reports.
Canara Bank JVs
Canara Robeco Asset Management Company is a joint venture between the PSU bank and Robeco Groep N.V. Canara bank has a 51% stake in it. and has reportedly begun the process for listing of the AMC. The PSU bank has another JV in the life insurance business called Canara HSBC Life Insurance Company. The bank is also moving to get this business listed. Reports stated that the bank has decided to dilute its 14.5% stake in this life insurance venture.
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