State Bank of India (SBI) expects a valuation of $5-7 billion for its proposed holding company that will hold the bank?s stake in insurance company SBI Life and asset management company SBI Funds Management. According to SBI chairman OP Bhatt, the holding company will be formed within the next three months. SBI is exploring the legal issues. The bank will set up another company for management of pension funds, the chairman said.
?We have been receiving feedback from various merchant bankers, and based on those estimates and our own valuation, we expect the holding company to fetch a valuation of anything between $5-7 billion,? Bhatt told reporters after addressing a banking conclave organised by FICCI in Kolkata. The formation of the holding company could be followed by placement to strategic investors, and finally its listing.
?We will be listing the company not to mop up funds but to get a feel of its valuation, which will have a bearing on the bank?s own valuation,? Bhatt said.
SBI Life is a joint venture between SBI and Cardiff SA of France and SBI Funds Management Ltd is a venture with Societe Generale Asset Management. The holding company will also control SBI?s stake in a proposed non-life insurance business, for which the public sector banking major has short-listed three foreign partners.
Bhatt said the holding company will be formed within the next two-three months.
?We are currently studying all the legal issues about the transfer of stake and formation of the holding company,? he said.
On the current year?s performance outlook, Bhatt said he expects a 20% growth in credit offtake and 25% growth in despoits.