Around 15 such entities are being readied for IPOs or strategic divestment in the medium to long term, according to sources cited by PTI.
Banks have been advised to infuse additional capital into their subsidiaries and joint ventures, if necessary, to help expand operations ahead of any potential market listing. The objective is to build sufficient scale in these businesses to maximise returns from future monetisation.
As part of the preparatory steps, the finance ministry has also asked banks to focus on strengthening governance frameworks, adopt more professional decision-making practices, and enhance overall operational efficiency within their subsidiaries.
SBI among key players eyeing future listings
State Bank of India, the country’s largest lender, is likely to consider listing its two major subsidiaries, SBI General Insurance and SBI Payment Services, after further scaling up their businesses.
SBI General Insurance Company, which was incorporated on February 24, 2009, reported a profit of Rs 509 crore for the financial year ended March 2025. During the same period, the company allotted 3,71,693 equity shares of Rs 10 each, resulting in a slight reduction in SBI’s stake from 69.11% to 68.99%.
SBI Payment Services Pvt Ltd, which handles merchant acquiring operations, is 74% owned by SBI, with the remaining stake held by Hitachi Payment Services. As of March 31, 2024, SBI Payments had over 33.10 lakh merchant payment acceptance touchpoints, including 13.67 lakh point-of-sale machines across India, making it one of the country’s largest acquirers.
Canara Bank leads with active listing pipeline
Among other PSU banks, Canara Bank has already initiated the process of listing its asset management joint venture, Canara Robeco AMC. The lender is also planning to take its life insurance joint venture, Canara HSBC Life Insurance Company, public. As part of the move, Canara Bank has approved the dilution of a 14.5% stake in the life insurance business.
The ministry’s directive to public sector lenders to monetise non-core assets aligns with the government’s broader strategic divestment programme and efforts to deepen India’s capital markets by bringing in more state-backed companies to public shareholding.
Shares of public sector banks reacted positively to the finance ministry’s directive, with several lenders posting intraday gains on Monday. Central Bank of India led the rally, climbing 2.4%, followed by Canara Bank, Bank of Baroda, Bank of India, and Union Bank of India, which each gained 2.3%. Indian Bank rose 1.9%, while Indian Overseas Bank added 1.2%. Shares of SBI saw a more moderate increase of 1%.
Also read | SBI, other PSU bank stocks rally up to 3% as FinMin pushes for monetisation of subsidiary investments
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