Sbi Gilts Board View On Parent Stake Sale Soon

The board of SBI Gilts is expected to take a view on diluting State Bank of India's (SBI) 85 per cent stake in the company during this fiscal as per an agreement with Asian Development Bank (ADB), which holds the balance stake. As per the pact, the promoter's holding has to be diluted after SBI Gilts completes four years of operations.

"Since SBI Gilts has completed four years of operations we will have to take a view on this issue this year," said SBI Gilts managing director and chief executive officer R C Royappa.

At present, ADB holds 15 per cent each in SBI Gilts, SBI Capital Markets and SBI Asset Management Company with an agreement that the promoters will dilute their stakes by way of public offering or private placement. However, none of these companies have yet gone public or diluted their promoters' stake.

 

According to Royappa, "Although there is this agreement in place, it is not binding upon SBI to dilute its stake within a fixed period. It will be a mutual decision."

Meanwhile, SBI Gilts at its annual general meeting yesterday announced a net profit of Rs 31.54 crore for fiscal 1999-2000 against Rs 28.74 crore achieved in the previous year. The board has declared a dividend of 12 per cent against 10 per cent announced in the previous year. The gross profit has touched Rs 50.34 crore against Rs 43.44 crore registered last year. As a result, the company's net worth has gone up from 147.14 crore to Rs 165.26 crore. The reserves and surplus went up from Rs 47.14 crore to Rs 65.26 crore.

The company has registered a growth of 78.22 per cent in turnover of government securities and income from trading has also gone up 161 per cent compared with the previous year.