The Hindu Business Line : SBI to float private equity fund for SMEs

Hyderabad, June 13 State Bank of India will float a private equity fund roping in local investors especially for lending to small and medium enterprises (SMEs).

The fund is likely to be operational before the end of this calendar year, according to Mr Om Prakash Bhatt, Chairman, State Bank of India (SBI)

“We are awaiting regulatory approval for the proposed fund in which SBI will have a 20 per cent stake,” Mr Bhatt told newspersons on the sidelines of a conference on banking at Indian School of Business (ISB) here on Friday.

There was lot of potential in local private investors and SME sector, Mr Bhatt said adding that the first tranche of the fund could be over Rs 500 crore though there was “strict upper ceiling.”

The ticket size of private investors in the fund could be between Rs 10 crore and Rs 100 crore, he added.

On the increase in the interest rates following the recent hike in repo rate by Reserve Bank of India, Mr Bhatt said the bank would prefer to wait and watch. ``We can afford to wait for a week or two before taking a call. We pool in all the data and examine,” he said.

Merger of arms

On the merger of its associate banks with itself, the SBI head said the bank was awaiting approval from the cabinet as the Law Ministry cleared the merger of State Bank of Saurashtra with SBI.

``We will take a couple of weeks to complete the merger after cabinet’s approval,” he added.

The bank would consider merger of other associate banks with it after the completion of State Bank of Saurashtra’s merger ``as it would answer many questions about mergers”, he said.

The unions were largely positive for mergers now, he added.

When asked about acquisition plans, he said: ``First is the amalgamation of the family. Next comes outside acquisitions.”

A package for upward revision of salaries for SBI employees was being worked out in view of the Sixth Pay Commission’s report, among others, he added.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Wheat procurement tops 220 lakh tonnes

Full monsoon coverage with 14-day lead time seen

DAE maps out ‘clusters’ of Fast Breeder Reactors

Reliance Comm-MTN merger talks could be in trouble

Inflation at 8.75%, hits 7-year high on dearer primary goods

Ranbaxy shares up on buzz of Pfizer interest

Export duty on long steel products hiked

Esmark rejects Severstal offer of $17/share

TPG Newbridge may invest in Shriram City Union

India’s IT market likely to grow 18%: Forrester

The bankers’ bonhomie

Global uncertainty hits M&A deals

Markets this Week

Bond prices fall by 40 paise

Banking conclave

SBI to float private equity fund for SMEs