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The executive committee of the central board of State Bank of India on Monday accorded final approval for divestment of the bank’s stake in SBI Life Insurance Company through an initial public offer.
SBI Life’s proposed IPO will involve an offer-for-sale of up to eight crore equity shares each at such price (band) per equity share as may be fixed and determined by the insurer and the selling shareholders (SBI and BNP Paribas Cardif S.A.) in consultation with the book running lead managers, to investors.
The IPO will be in accordance with SEBI and IRDAI regulations or other provisions of law as may be prevailing at that time and in such manner as may be determined by the (SBI) board (including by means of the book-building process as prescribed by SEBI).
The bank, in its qualified institutional placement prospectus, said it intends to sell up to 8 per cent of its shareholding in its subsidiary SBI Life, as well as reduce its shareholding in SBI General Insurance Company.
In FY17, SBI realised ₹1,755 crore from the sale of part of its shareholding in SBI Life. In the process, the bank’s stake in the insurance company came down to 70.10 per cent from 74 per cent.
SBI Life Insurance is a joint venture between SBI and BNP Paribas Cardif. SBI owns 70.10 per cent of the total capital and BNP Paribas Cardif holds 26 per cent, while Value Line Pte Ltd (an affiliate of KKR Asian Fund II LP) and MacRitchie Investments Pte Ltd (an indirect wholly-owned subsidiary of Temasek Holdings) hold 1.95 per cent stake each in the life insurer.
AUM risesAs of March 31, 2017, SBI Life’s assets under management stood at ₹97,737 crore (₹79,828 crore as at March-end 2016). In FY17, the life insurer underwrote insurance premiums amounting to ₹21,015 crore (₹15,825 crore in FY16).
In FY17, approximately 51 per cent of SBI Life’s gross written premiums were sourced through bancassurance as against 53 per cent in the previous fiscal.
In FY17, agency channels (licensed advisors) contributed 34 per cent (39 per cent) of the insurer’s gross written premium.
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