SBI Life Insurance Company (SBI Life) has filed a draft prospectus with market regulator SEBI for a public offering, which could be the biggest ever so far by a life insurer in the country.

The proposed IPO, which would be through the offer-for-sale route, would involve SBI and foreign partner BNP Paribas Cardiff SA together offloading 12 crore shares of SBI Life at a premium.

While SBI plans to offload eight crore shares, BNP Paribas Cardiff SA will sell four crore shares of SBI Life through this public offering. The public offer may lead to both the selling shareholders together mobilising ₹7,000 crore, say life insurance industry observers. At this level, it would be the largest BFSI sector IPO in the last decade, they added.

As much as 10 per cent of the proposed public offering will be reserved for shareholders of SBI, which is India’s largest public sector commercial bank.

SBI holds 70.1% stake

As on date, SBI holds 70.1 per cent, while BNP Paribas Cardiff SA (foreign joint venture partner) has 26 per cent stake in SBI Life. Value Line Pte Ltd, an affiliate of KKR Asian Fund LP and MacRitchie Investments Pte Ltd, an indirect wholly-owned subsidiary of Temasek Holdings (Private) Ltd, hold 1.95 per cent stake each.

If the proposed public offering gets SEBI approval and the public issue becomes a reality, SBI’s holding in SBI Life Insurance is expected to come down to 62.10 per cent, while BNP Paribas Cardiff SA’s stake is expected to drop to 22 per cent.

The public shareholding in the life insurer will be 12 per cent, going by the draft red herring prospectus filed with the Securities and Exchange Board of India (SEBI). The offer of 12 crore shares would constitute up to 12 per cent of the post-offer paid-up share capital of the company.

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