According to sources quoted by PTI (Press Trust of India), the Indian government has asked 15 public sector banks (PSBs) to speed up the process of listing their subsidiaries and joint ventures on the stock market. 15 public sector banks such as State Bank of India (SBI), Bank of Baroda, Canara Bank, etc. These institutions often have smaller companies under them that provide specialized services. This can be done through 2 ways:
- Launch IPO – This means listing the subsidiaries on the stock market and selling shares to the public. It helps the banks raise money and gives investors a chance to invest directly in parts of the bank’s business.
- Strategic Disinvestments – Selling shares to private investors or companies instead of general public.
How are banks preparing for the listing?
About 15 subsidiaries/joint ventures (smaller companies) that are owned by big banks like SBI, Canara Bank, PNB, and IDBI are being prepared for listing over the medium to long term. These banks have also been told to invest more capital if needed, into these entities to help them grow and become more attractive to investors. This help to improves their size, revenue, and readiness for the market .
The Finance Ministry’s has instructed banks to boost governance standards before listing means the government wants to ensure that these companies are professionally run, transparent, and structurally sound before they enter public markets. This guarantees that these companies are effectively managed and ready to face public investors.
Not all 15 PSBs subsidiaries will go public at the same time. It will happen gradually. This is a long-term plan that will happen over the next few years. The idea is to make these companies stronger and more valuable before they are sold or listed on the stock exchange.
Why it is important?
-
It helps banks get extra funds for growth.
-
It gives investors new opportunities to invest in growing businesses.
- It will strengthen Indian Stock market by supporting the government’s plan to make public sector companies more efficient, competitive and profitable.
Some selected subsidiaries preparing for IPO
SBI is planning to launch IPOs for:
-
SBI General Insurance, which made a profit of ₹509 crore in FY 2024–25.
-
SBI Payment Services, a large digital payment company where SBI owns 74% and the company serves over 33 lakh merchant outlets.
Canara Bank is planning to:
- Canara Bank is planning to list two of its key subsidiaries as part of its broader disinvestment strategy. It aims to list Canara Robeco Asset Management Company in public market
- Also preparing to sell a 14.5% stake in Canara HSBC Life Insurance.
Other public sector banks like PNB, IDBI Bank, Punjab & Sind Bank, Central Bank of India, and UCO Bank are also preparing to list or sell parts of their subsidiaries.
