SBI drops after decision to prune stake in general insurance biz

State Bank of India fell 0.73% to Rs 263.40 at 10:53 IST on BSE after the bank said it has decided to dilute its stake in SBI General Insurance from 76% to 51%.

The announcement was made before market hours today, 26 March 2015.

Meanwhile, the S&P BSE Sensex was down 260.59 points or 0.93% at 27,851.24.

On BSE, so far 5.37 lakh shares were traded in the counter as against average daily volume of 21.08 lakh shares in the past one quarter.

The stock was volatile. The stock fell as much as 1.18% at the day's low of Rs 262.20 so far during the day. The stock rose as much as 0.16% at the day's high of Rs 265.80 so far during the day. The stock had hit a 52-week high of Rs 335.90 on 28 January 2015. The stock had hit a 52-week low of Rs 172.80 on 25 March 2014.

The stock had underperformed the market over the past one month till 25 March 2015, sliding 10.22% compared with the Sensex's 3.09% fall. The scrip had also underperformed the market in past one quarter, declining 13.24% as against Sensex's 3.32% rise.

The large-cap public sector bank has equity capital of Rs 746.57 crore. Face value per share is Re 1.

State Bank of India (SBI) said that consequent upon the promulgation of the Insurance Laws (Amendment) Ordinance, 2014 and subsequently passed by both the houses of parliament, the Executive Committee of the Central Board (ECCB) yesterday, 25 March 2015 decided to initiate the necessary action as per joint venture (JV) agreement for dilution of SBI's stake in SBI General Insurance from 76% to 51% with corresponding increase of stake of IAG from 26% to 49%, including appointment of a valuer to facilitate valuation and price discovery.

SBI's net profit rose 30.2% to Rs 2910.06 crore on 12.1% growth in total income to Rs 43783.98 crore in Q3 December 2014 over Q3 December 2013.

The Government of India held 58.6% stake in SBI (as per the shareholding pattern as on 31 December 2014).

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