Mumbai: In one of the biggest deals in the Indian life insurance sector in recent years, global private equity firm Carlyle Group on Friday said it has acquired a 9% stake in listed insurer SBI Life Insurance Co. Ltd from BNP Paribas Cardif SA. According to SBI Life Insurance’s closing stock price on Friday, the 9% stake is worth around ₹5,500 crore.
Shares of SBI Life closed at ₹612.25 apiece, up 5.47%. The last major deal in the life insurance space was in August 2018, when a consortium of Westbridge Capital, Madison Capital and Rakesh Jhunjhunwala agreed to acquire Star Health and Allied Insurance Co. Ltd for around ₹6,000-6,500 crore.
“The life insurance industry in India has strong growth potential thanks to favourable demographics and an increasing focus on financial savings. SBI Life, led by a strong management team, is helping deliver this promise in the life insurance space and is well-positioned to further benefit from industry trends," said Sunil Kaul, managing director and head (South-East Asia) at Carlyle Asia's buyout advisory team.
Following this transaction, French insurer BNP Paribas Cardif and Carlyle now own 12.8% and 9% of SBI Life, respectively. State Bank of India (SBI) remains the majority shareholder with a 62.1% stake.
“We are delighted to have Carlyle, a highly-regarded long-term investor, as shareholder of the company. Carlyle’s trust in the company will further strengthen our resolve to enhance our leadership position in India’s life insurance industry," said Sanjeev Nautiyal, managing director and chief executive of SBI Life.
Mint had in September 2018 reported that BNP Paribas is looking to sell part of its stake in SBI Life. The stake sale was part of a move to bring down the stake held by promoters to 75%, as per Sebi laws for listed companies that mandate minimum public shareholding of 25% within three years of listing.
SBI Life went public in September 2017 in an initial public offering (IPO) that saw the two promoters—state-run lender SBI and BNP Paribas—collectively sell 12% stake, with SBI selling 8% and BNP Paribas Cardif 4%.
The IPO valued the company at ₹70,000 crore.
The Carlyle deal comes at a time when PE interest in the insurance sector is high, with investors buying both minority and majority stakes in a host of insurers.
Earlier this week, homegrown PE firm True North acquired a controlling stake in health insurer Max Bupa Health Insurance Co. Ltd for over ₹500 crore. The deal valued the insurer at ₹1,001 crore.
Last year, Royal Sundaram General Insurance Co. Ltd sold 40% of its stake to Ageas Insurance NV of Belgium for ₹1,520 crore, Mint reported in November last year. PE firm Warburg Pincus Llc acquired a 26% stake in IndiaFirst Life Insurance Co. Ltd for around $100 million in June.
Carlyle has invested in the financial services industry in Asia Pacific for 20 years, deploying more than $4 billion of equity in more than 15 PE investments, as of 31 December. In India, Carlyle’s recent investments in financial services include PNB Housing Finance Ltd and SBI Card.
This story has been published from a wire agency feed without modifications to the text.