Multilateral lending agency Asian Development Bank(ADB) has exited SBI Caps, the investment wing of the country?s largest bank State Bank of India.

ADB, which had picked up 13.84% in SBI Caps in 1997, has sold its entire stake to SBI. SBI Caps consequently has become a wholly subsidiary of the SBI.

Speaking to FE, SBI Caps managing director S Vishvanathan confirmed about the deal which was finalised recently. He, however, refused to give the details of the deal.

?After 13 years, ADB has exited SBI Caps. The exit decision was taken by the ADB. We would not be able to comment on the amount paid by ADB to SBICAP for acquiring the stake,?? he said.

However, sources said SBI had paid a substantial premium to ADB for buying back its 13.84% stake .

Sources explain ADB had picked up stake in SBI Caps in 1997 to help developing the capital market activities in the country.

?ADB?s thinking while exiting SBI Cap was that it has fulfiled its purpose and could reinvest the money for some other purpose,?? said sources in the bank.

It is not immediately known whether SBI, which was earlier keen to have a foreign partner, for SBI Caps would go for any stake selling.

Though SBI Caps was looking for a global strategic partner to tap the opportunities of ADR/GDR issues by Indian corporates earlier, of late it has not pursued that agenda that keenly.

Earlier, SBI also had IPO plans for SBI Caps for unlocking the value of its investment. But, Vishvanathan said the company didn?t require any capital. The company has currently a capital base of Rs 58 crore.

The company has posted a 63% jump in profit after tax to Rs 150.10 crore in 2009-10, against 92.08 crore (excluding the extraordinary income of Rs 74.98 crore) in 2008-09. It had declared a dividend of 140% during the year. SBI Caps offers services in the broad areas of mergers and acquisitions, project advisory, structural finance, and capital markets. In M&A, for instance, it offers advice on privatisation, business valuation, and restructuring. In the capital markets, it handles public and rights offers, private placements and buybacks, while ?project advisory? involves handling core sectors such as power and telecom. It has also been exploring new avenues like securitisation.