SBI sells 37% in MF arm to French firm

In a bid to regain the numero uno position in the mutual fund business, State Bank of India has divested 37 per cent stake in its MF arm SBI...

In a bid to regain the numero uno position in the mutual fund business, State Bank of India has divested 37 per cent stake in its MF arm SBI Fund Management Pvt Ltd (SBIFMPL) to French firm Societe Generale Asset Management (SGAM) for over $35 million (Rs 160 crore).

SBI would now hold 63 per cent stake in the mutual fund. As per the agreement, a third party cannot be inducted for seven years.

SBIFMPL had assets under management of around Rs 5,500 crore with a market share of 3.51 per cent in June.

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‘‘The partnership should lead to SGAM giving us a lot of input, particularly in risk management, product development and technical aspects, which could help position SBIFMPL as one of the top players in the MF industry,’’ SBI chairman A.K. Purwar said after signing the MoU with SGAM.

The SBI chief further said, ‘‘Both the buyer and seller are comfortable with it and the money is expected to come in after all the necessary approvals from government, RBI, Sebi and FIPB are in place in the September quarter.’’

SBI was also open for tie-ups for its factoring and merchant banking businesses, he added. SGAM director-international network Christian D’Allest said: ‘‘The partnership provides us with a key position in the Indian MF industry.’’

Societe Generale with aggregate assets of over 252 bn euros worldwide and operating in 20 countries, would get proportionate representation on SBIFMPL board.

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