SBI Life Insurance IPO aims for Rs70,000 crore valuation
The SBI Life Insurance IPO will see stakeholders SBI and BNP Paribas Cardif sell 8% and 4% stake to raise Rs8,400 crore at the upper end of the price band of Rs685-700 per share
Mumbai: SBI Life Insurance Co. Ltd on Wednesday said it would launch its Rs8,400 crore initial public offering (IPO) on 20 September. The share sale will close on 22 September.
Founded in 2001, SBI Life Insurance is a joint venture between India’s largest lender State Bank of India and BNP Paribas Cardif. As of 30 June, it had a portfolio of 37 individual and group products, including a range of protection and savings products to address the insurance needs of diverse customer segments.
The insurer has priced its shares in a range of Rs685-700 per share. At the upper end of this price band, the initial share sale values the firm at Rs70,000 crore. This is significantly higher than its Rs46,000 crore valuation in December, when the insurer sold a 3.9% stake to investors KKR and Co. Lp and Temasek Holdings Pte Ltd for around Rs1,794 crore.
“Minority stake sale to KKR and Temasek was a private deal, whose liquidity is low. In IPO, you have greater liquidity and so the valuation is higher than a minority stake sale in a private deal,” said Arundhati Bhattacharya, chairman, State Bank of India at a press conference on Wednesday.
The IPO is a pure offer for sale with SBI selling 8% stake and BNP Paribas selling 4%. SBI and BNP Paribas will end up with 62.1% and 22% stake respectively in the firm after the IPO.
SBI Life Insurance has appointed JM Financial Institutional Securities Ltd, Axis Capital Ltd, BNP Paribas, Citigroup Global Markets India Pvt. Ltd, Deutsche Equities India Pvt. Ltd, ICICI Securities Ltd, Kotak Mahindra Capital Co. Ltd and SBI Capital Markets Ltd to manage the IPO.
As of 31 March, SBI Life Insurance had assets under management (AUM) of Rs97,736.6 crore, up 37% from a year ago. The company reported a profit of Rs954.65 crore in 2016-17, up 13% from the immediate previous financial year.
SBI Life Insurance will be the second life insurer to go public. Last year, ICICI Prudential Life Insurance Co. Ltd raised Rs6,000 crore in an initial share sale, the first public offering by an Indian life insurer. ICICI Bank sold a 12.63% stake through the IPO, which valued the life insurer at about Rs48,000 crore, Mint reported.
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