SBI to divest up to 5% in SBI Life

SBI’s plan to sell a stake comes at a time when the life insurer has been firming up plans to go public


SBI Life is a joint venture between State Bank of India and BNP Paribas Cardiff. SBI owns 74% in the life insurer.
SBI Life is a joint venture between State Bank of India and BNP Paribas Cardiff. SBI owns 74% in the life insurer.

Mumbai: State Bank of India Ltd (SBI) will divest up to 5% of its stake in its life insurance subsidiary SBI Life Insurance Co. Ltd, the lender said in a filing to stock exchanges on Friday.

“The Executive Committee of the Central Board at its meeting held on 14 October, 2016, has approved to dilute up to 5% stake of SBI in SBI Life to a non-promoter,” the lender said in the filing.

SBI Life is a joint venture between State Bank of India and BNP Paribas Cardiff. SBI owns 74% in the life insurer.

Last week, Mint reported that SBI was holding talks with private equity funds to sell up to 5% stake in the insurance company.

The stake sale could fetch the bank as much as Rs1,950 crore, at valuation of three times its financial year 2015-16 embedded value of Rs13,000 crore, Mint reported.

The plan to sell a stake comes at a time when the life insurer has been firming up plans to go public.

In May, a Business Standard report citing top management said the insurance firm was planning to go public in 2017.

The private placement of shares before the IPO will help the company work out an indicative price for the IPO.

Before it went public in September, ICICI Prudential Life Insurance Co. Ltd too sold shares through a private placement.

In November, ICICI Bank Ltd sold 6% of its stake in its life insurance joint venture ICICI Prudential Life Insurance. Of this, 4% stake was sold to PremjiInvest and its affiliates. The remaining 2% stake was picked up by Compassvale Investments Pte Ltd, a unit of Singapore-based investment company Temasek Holdings. The transactions, worth around Rs1,950 crore, valued the firm at Rs32,500 crore.

When ICICI Prudential Life Insurance launched its Rs6,057 crore IPO last month, it managed to sell shares to investors at a valuation of Rs47,955 crore.

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