State Bank of India (SBI), on Thursday, said the executive committee of its central board of directors has approved the divestment of 2.10 crore equity shares, constituting 2.1 per cent of its stake in its subsidiary, SBI Life Insurance Company.

This divestment is to achieve Minimum Public Shareholding (MPS) of 25 per cent (remaining part of the bank’s share for MPS) through offer for sale (OFS) process through stock exchange mechanism as per the regulatory prescription, the bank said in a regulatory filing.

In Q2 (July to September) of FY20, India’s largest bank had raked in a net profit of ₹3,484 crore on sale of ‘certain portion’ of its investment in SBI Life, which is a joint venture between SBI and BNP Paribas Cardif.

On September 11, 2019, SBI had informed the exchanges about “divestment of 3.50 crore +1 crore equity shares, constituting 3.5 per cent with an oversubscription of up to 1 per cent of our stake in SBI Life, to achieve MPS of 25 per cent (part of bank’s share for MPS) through OFS process through stock exchange mechanism as per the regulatory prescription”.

After taking into consideration requests received from listed entities and industry bodies, as well as considering the prevailing business and market conditions, SEBI, on May 14, decided to grant relaxation from the applicability of the October 10, 2017, circular on non-compliance with the MPS requirements.

So, the stipulations of the aforesaid circular have been relaxed for listed entities for whom the deadline to comply with MPS requirements falls between the period from March 1to August 31.

Meanwhile, the executive committee of SBI’s central board, in its meeting held on Thursday, granted its approval “to examine the status and decide on long-term fund raising in single/multiple tranches of up to $1.5 biilion under Reg-S/144A through public offer and/ or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY21”.

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