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State Bank of India on Tuesday said BNP Paribas Cardif is keen to increase its stake in SBI Life Insurance from 26 per cent to 36 per cent. Once the foreign joint venture partner increases its stake to 36 per cent, SBI’s stake in SBI Life will get diluted to 64 per cent.
“They (BNP Paribas Cardif) are interested in dialling up 10 per cent. They have the right to give a call which they have exercised…The valuations will take place now and the process will be over in the next three to four months,” SBI Chairperson Arundhati Bhattacharya said. The company can also go for an initial public offer later, she added.
In March this year, Parliament passed a Bill to allow foreign direct investment (FDI) up to 49 per cent in the insurance sector. BNP Paribas Cardif will increase its stake by buying SBI’s shares in the life insurance business and there will be no fresh capital infusion.
“It will be a sale of our equity stake. We will encash our stake,” Bhattacharya added.
IAG to raise stake, too Further, SBI’s general insurance partner, Insurance Australia Group (IAG), will be raising its stake to 49 per cent. In the SBI General Insurance joint venture, SBI owns 74 per cent and IAG the remaining 26 per cent.
“IAG has given a call for exercising their entire option of 49 per cent. Dial-up has not happened but valuation is going on,” Bhattacharya said, adding that IAG will also increase stake by buying SBI’s stake.
“Each of us have a valuer and depending upon whether they are close enough (the stake sale transaction will happen)...If they are not within 10 per cent of each other then we will go for a third valuer,” she said. IAG will increase its stake in SBI General Insurance this fiscal, the SBI chief added.
On Greece crisis “I don’t think it will have much impact. India has very little exposure. It is just the fact that the market themselves hate uncertainty. That is what is currently impacting the market. There is nothing other than uncertainty that is wrong. So, I think the moment some certainty comes — either yes or no, the market will move ahead,” the SBI chief said.
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