State Bank of India will sell a 1.42% stake in asset management unit SBI Funds Management to 30 investors for 16.55 billion rupees ($173.5 million) in a pre-IPO placement, the lender said on Thursday.
The stake sale at 574 rupees per share - the top end of the asset manager's IPO price band - provides an early benchmark for the unit's valuation and indicates institutional demand before the public offering.
SBI is selling 28.8 million shares of SBI Funds to investors including Tata AIG General Insurance, Go Digit General Insurance, 360 ONE funds, Bennett Coleman, and several alternative investment funds and family offices.
SBI Funds' $1.22 billion IPO is set to open for bids on July 14, with India's largest asset manager seeking a valuation of up to 1.17 trillion rupees.
The company, a joint venture between India's largest lender SBI and Europe's largest asset manager, Amundi, has set a price band of 545-574 rupees per share for the three-day share sale.
The stock is expected to list on Indian stock exchanges on July 21.
SBI Funds is not selling new shares in the IPO and will not receive any proceeds. SBI is selling up to 128.3 million shares, while Amundi India Holding will divest up to 75.4 million shares, together offloading about 10% of SBI Funds Management's paid-up equity capital.
($1 = 95.3800 Indian rupees)
