Despite the higher valuations that rivals HDFC AMC and Nippon AMC are commanding, State Bank of India (SBI) Chairman Dinesh Khara reaffirmed that the bank has no intention of listing its AMC business, SBI Mutual Fund or SBI Funds Management.
Khara mentioned difficulties experienced by listed companies like ICICI Securities, which is going through the de-listing process, in a post-result analyst conference call.
With net profit increasing 24 percent YoY to Rs 20,698 crore and net interest income expanding 3.1 percent YoY to Rs 41,656 crore, the public-sector lender announced an optimistic January-March (Q4FY24) performance.
Chairman Khara stated that he does not have any plans to IPO the asset management division and that he is still aware of the values that Nippon AMC and HDFC AMC have taken. Khara stated, "In these businesses, knowledge capital matters more than financial capital," and he expressed his desire to prevent SBI's other operations from being under constant scrutiny.
Initially, SBI intended to raise $1 billion by going public with its mutual fund subsidiary on December 15, 2021. But the plans were eventually abandoned since the bank decided it had enough capitalization and didn't need to raise money right now.
SBI would have joined the ranks of companies like HDFC AMC, UTI AMC, Nippon Life AMC, and Aditya Birla Sun Life AMC if its mutual fund IPO had been successful.
At 39.6 times price-to-earnings (PE) ratio, HDFC AMC is now trading at the highest level. Nippon Life is next at 32.8 times, Aditya Birla Sun AMC is at 20.03 times, and UTI AMC is at 14.93 times.
In the last year, Nippon Life AMC's stock more than quadrupled in value, while HDFC AMC's shares have doubled at the exchanges.
SBI Life Insurance and SBI Cards are the other two publicly listed companies of SBI. Three other divisions of the institution might be made profitable: SBI Caps Investment Banking, the mutual fund division, and the general insurance vertical.
