State Bank of India, the country’s largest lender, through an initial public offer, has decided to sell a stake in the life insurance venture SBI Life.
The company in its filing to the exchanges also added that they are exploring the possibility of diluting 8% SBI’s stake in SBI Life which, including the proposed dilution of Cardif at 4%, resulting in a total offer of sale up to 12% share through IPO.
Last month, the company had invited proposals from merchant bankers and law firms for selection of book running lead managers for IPO.
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The company is a joint venture between State Bank of India (SBI), the country’s biggest lender, and BNP Paribas Cardif. SBI owns 74 per cent of the total capital and BNP the rest. BNP ruled out increasing its stake in SBI Life to 49 per cent ahead of the proposed initial public offering slated for next year.
State Bank of India provides a range of products and services to personal, commercial enterprises, large corporate, public bodies and institutional customers. Its segments include Treasury, which includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts; Corporate/Wholesale Banking and many others.
SBI Life could command a valuation of at least Rs 60,000 crore when it lists given that it is the secondbiggest private sector insurer after ICICI Prudential, market experts and investment bankers said. The insurer was valued at Rs 46,000 crore when private equity funds KKR and Temasek purchased a small stake at Rs 460 per share in December 2016.
ICICI Prudential, which raised Rs 6,000 crore last year in the first ever private sector insurance IPO, was valued at Rs 48,000 crore at the time of listing. The private insurer now commands a market value of Rs 58,000 crore.
In December 2016, SBI had sold a 3.9% stake to Singapore state investment firm Temasek Holdings (1.95%) and private equity giant KKR & Co. (1.95%) for Rs 1,794 crore ($265 million). The deal valued SBI Life at Rs 46,000 crore.
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