The country’s largest lender State Bank of India (SBI) is looking at an initial public offering for its life insurance arm SBI Life Insurance in the next 12-18 months, according to SBI Chairman Arundhati Bhattacharya.

Addressing the media at the inauguration of SBI Life Insurance’s central processing centre in Navi Mumbai, Bhattacharya said, “Yes, we are looking at it in the next year or 18 months. Frankly, we still need to give time to our joint venture partners for them to take a decision on the dial up (increase in stake). Once that is known, then we will come out with an exact timeline.”

“They have already been advised but there is no precise timeline,” she added.

SBI did not divest 5 per cent in SBI Life as envisaged earlier; it sold only 3.9 per cent on December 9 to investors, including Temasek and KKR at ₹460 a share, valuing the life insurer at ₹46,000 crore. (Following this transaction, SBI holds 70.1 per cent and its joint venture partner BNP Paribas Cardif 26 per cent].

On this, Bhattacharya said, “We divested less because we wanted to have the ability to do an IPO. As you know, in an IPO, you have to put 10 per cent, at least. If they dial up by another 10 per cent we would not have another 10 per cent to divest. Therefore, we decided to do it at 3.9 per cent so that even if they dial up and in the IPO, only we put our stake, even then we will be at 50.1 per cent, which is where we want to be.”

On the valuation of SBI Life Insurance vis-a-vis its private sector peers, Bhattacharya said: “I think ICICI Prudential Life currently is around ₹42,000 crore and ours around ₹46,000 crore. And, if you put HDFC and Max together, probably it will be a little more. However... the MD & CEO of SBI Life believes that by the time the HDFC Life-Max deal actually goes through, we will be bigger than (the two).... put together. So, we still believe we will be the largest in this area.”

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