SBI to inject funds into insurance arm

SBI to inject funds into insurance arm

Kolkata: The country’s largest public sector lender, State Bank of India, is planning to inject fresh capital into its insurance arm, SBI Life, which is awaiting the right market conditions to raise funds through an initial public offering (IPO).

Company’s managing director and chief executive officer Uday Sankar Roy, however, denied to divulge the amount SBI LIfe Insurance intended to bring in as fresh capital.

Commenting on the IPO, he said, “We are progressing on the IPO. But, in the current market scenario, it is difficult to say at this point of time when it will hit the market."

SBI chairman O.P. Bhat had earlier said SBI Life Insurance, in which the banking major has a majority 76% stake, would hit the capital market by the end of 2009.

BNP Paribas Assurance holds the remaining 24% stake in the life insurance firm.

Apart from the volatility of the capital market, which, according to Roy, has more to do with western disturbances some impending regulatory changes domestically, including increasing higher foreign direct investment, might be thought upon before going for the IPO.

The government has already tabled the Insurance Bill in Parliament aiming to increase the FDI cap in the sector to 49% from 26% now.