The Hindu Business Line : SBI to inject funds into insurance arm

KOLKATA: The 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).

The company’s Managing Director and Chief Executive Officer Mr Uday Sankar Roy, however, refused to divulge the amount SBI LIfe Insurance intended to bring in as fresh capital.

“It is difficult to say now. It will all depend upon the business requirement,” he said. 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 th e market.”

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

BNP Paribas Assurance holds the remaining 24 per cent stake in the life insurance firm. Apart from the volatility of the capital market, which, according to Mr 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 per cent from 26 per cent now. - PTI

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