New Delhi: The country’s largest lender State Bank of India Thursday approved the sale of 4% stake in SBI General Insurance for ₹ 482 crore to two alternative investment funds (AIFs).
The executive committee of SBI at its meeting held Thursday approved the sale of 86.2 lakh shares of ₹ 10 each, equalling to 4% stake in its subsidiary SBI General Insurance Company Ltd (SBI GI), for ₹ 482 crore (around $66 million), SBI said in a release.
Axis New Opportunities AIF-I and PI Opportunities Fund-I, an AIF of Premji Invest, will purchase 1.65% and 2.35% stake, respectively, from SBI.
The proposed transaction values SBI GI at over ₹ 12,000 crore. The deal is subject to regulatory approvals, said SBI.
After completion of the transaction, SBI will hold 70% stake in SBI GI, while its joint venture partner IAG International Pty Ltd will continue to hold 26%.
“Insurance segment is still young and nascent in India, it is an under-penetrated market, we foresee a significant scope of growth for SBI GI to achieve size, scale and profitability," said SBI Chairman Rajnish Kumar.
This transaction values SBI GI at around ₹ 12,000 crore, reflecting significant value creation within 7 years of business operations, Dinesh Khara, managing director, Global Banking and Subsidiaries, said.
SBI General Managing Director & Chief Executive Officer Pushan Mahapatra said the company is the fastest-growing general insurer in the private sector.
“The company is in just 7th year into operations and has already achieved sizeable scale, making it the seventh-largest private general insurance player as at the end of June 2018," Mahapatra said.
Kotak Mahindra Capital Company was the financial advisor for the transaction, while J Sagar Associates was the legal advisor.
This story has been published from a wire agency feed without modifications to the text.