SBI Mutual Fund is not pursuing its initial public offering to raise capital but to create a public market for its shares, Managing Director and Chief Executive Officer Debasish Mishra said, describing the listing as the company's "natural progression".
The remarks provide the clearest explanation yet for the proposed IPO, which will see existing shareholders pare their holdings instead of the company issuing fresh shares. State Bank of India will reduce its stake to 55.46% after the listing, while Amundi's holding will decline to 32.56%.
"We don't need capital, but we want to make the market," Mishra told NDTV Profit in an interaction. "The market is yet to be made; listing is a natural process of entering the market," he said, adding that the IPO marks "a natural progression" for the company.
Under the proposed share sale, State Bank of India will offload a 6.3% stake, while Amundi will sell 3.7% through the IPO, he said.
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Distribution Reach
Mishra also addressed concerns around the sale of third-party financial products through banks, saying SBI Mutual Fund has safeguards in place to prevent mis-selling.
"There is no risk of mis-selling," he said.
The company sells only products that have been cleared by a separate product committee, Mishra said, adding "We only sell products approved by our separate product committee."
Beyond SBI
Mishra said SBI Mutual Fund's distribution network extends beyond State Bank of India and includes multiple channels.
"We have five to six major distribution channels. Our distribution network includes over 1.3 lakh distributors. We also distribute through other banks," he said.
State Bank of India accounts for only about one-fourth of the fund house's distribution, according to Mishra. "SBI Bank accounts for only about 25% of our distribution."
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