We will sell non-core assets in right time and at right price: VG Kannan, SBI

In a chat with ET Now, VG Kannan, MD & Group-Exec, SBI, says the idea of selling 5% NSE stake was to ensure SBI does not have shortage of funds. Edited excerpts

ET Now: Is Rs 900 crore the amount of money that SBI would be happy with for the stake in National Stock Exchange?

VG Kannan: It is not a question of being happy or not happy. We are still in the negotiation stage. There are a few interested parties and we have 10 per cent stake already and we thought of divesting 5 per cent and we are still in negotiations. The exact amount we will come to know of course only after everything is finalised.

ET Now: What was the urgency to sell stake in NSE, I mean according to SBI chairman Arundhati Bhattacharya there is no dire need for State Bank of India to raise capital. Why are you looking at monetising one of your cream investments?

VG Kannan: I think we are in the process of ensuring that we do not have to go on raising money from the market. We expect growth to pick this year and in the event the growth picks up we would not like to be seen as having some shortage of capital. Having said that, I think we feel this asset has been there for a long time and whatever is the return, it will be quite handsome and we will be quite satisfied with the price which we have been indicated appears to be quite okay.

ET Now: Your seed investment in NSE, was it done at par? When you initially invested in NSE, did you invest at the par value, at the face value of Rs 10, what was your initial seed investment in NSE?

VG Kannan: We were the first investors in the NSE and right at the inception. I do not want to give you any-- yes we did invest at par and therefore I think that we have a good case for us to get a good return. And having said that we will continue to have 5 per cent in the event this particular sale goes through and one of our subsidiaries also will be having another 5 per cent. It is not that we are selling off the entire thing.

ET Now: Will you be comfortable with this valuation of Rs 900-1000 crore? Would you be looking to sell the remaining 5 per cent any time soon or any other strategic stake sales that you would do because you did mention that you are looking to give out some stakes in order to have enough capital on board?

VG Kannan: But as I told you we are not selling out the entire thing. We are only selling 5 per cent. In case we wanted to sell out the entire thing we would have already put the entire thing on the block and the process also is quite a lengthy process which has to be cleared with the NSE, it has to be cleared with the regulator and that fit and proper for the new investor, it is not that anyone can invest. So 5 per cent sale is adequate for now and as regards the quantum, I think you leave it to the management. I think we will take the right call.

ET Now: What are your classified noncore investments which you are looking at monetising in FY17?

VG Kannan: We have some investments in PE funds, we also have some investments in other primary investments. I think NSE is one of them which we have right now targeted and not the entire amount as I told you and we are not in urgency as such. As I mentioned, we are not desperate for capital but at the same time when we get some good opportunities it is only appropriate that we encash them.

ET Now: This is the capital or money you want to raise via stake sale of some of your non-core assets, I insist on the word the noncore assets.

VG Kannan: See with the Reserve Bank of India giving some leeway on account or revaluation of assets, I think the desperation is absolutely not there for the banks like SBI and there is no need for us to go on selling all the noncore assets and we will be selling the non-core assets as and when we feel it is the right time and the right price.