Sanjiv Chadha M& and CEO, BoB
Sanjiv Chadha M& and CEO, BoB | Photo Credit: R Jyothy

Bank of Baroda (BoB) is planning to monetise its life insurance subsidiary – IndiaFirst Life Insurance Co. Ltd. (IFLIC) – via the initial public offer route (IPO) in FY23 as its business is “fairly mature”.

BoB had upped its stake in IFLIC from 44 per cent to 65 per cent in the fourth quarter of FY22 by acquiring 21 per cent stake from joint venture partner Union Bank of India.

Carmel Point Investments India Pvt Ltd is the second largest shareholder in IFLIC with 26 per cent stake.

UBI’s stake in IFLIC

UBI sold 21 per cent stake in IFLIC to BoB for ₹766.30 crore. Now, UBI has 9 per cent stake in the life insurance company.

“Of our subsidiary businesses, there is one – IndiaFirst Life Insurance Company - which is fairly mature.

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“To my mind that business is something which we can look at monetising. So, that is something which we have guided earlier also,” Sanjiv Chadha, MD & CEO, BoB, said in an interaction with BusinessLine.

He observed that this seems to be a good year for undertaking monetisation of IFLIC.

Chadha underscored that currently, IFLIC is among the fastest growing life insurance companies in the private sector in the country.

“So, if the opportunity and timing is right, I think, that (monetisation) is something which could happen,” he said.

BoB has 16 subsidiaries including IFLIC, The Nainital Bank, BOB Financial Solution, BOB Capital Markets, Baroda BNP Paribas Asset Management, and six subsidiary Banks overseas.

Among private sector life insurance companies, only three – ICICI Prudential Life, SBI Life and HDFC Life – are listed. Public sector life insurance behemoth, Life Insurance Corporation of India is set to get listed on the bourse tomorrow.

IFLIC recorded 50 per cent year-on-year (yoy) growth in Individual New Business APE (annual premium equivalent) and 47 per cent yoy growth on Total New Business APE for FY 22, according to BoB’s investor presentation.

The life insurer’s assets under management as of March 31, 2022 stood at Rs 18,932 crore, recording 11 per cent yoy growth.

“We believe that the life insurance industry is geared to register robust growth over the long term, given the underpenetration of life insurance in India and the higher protection gap,” Axis Securities Research Analysts’ Dnyanada Vaidya and Sumit Rathi said in a report.

Additionally, the pandemic related uncertainties have highlighted the benefits of life insurance, they added.

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