SBI Life Insurance, a joint venture between State Bank of India (SBI) and BNP Paribas Cardif, initiated the next steps for its proposed initial public offering (IPO) by appointing bankers, even as SBI has decided to offload 12 percent as against 10 percent planned earlier.
The foreign partner is likely to sell 4 percent as against 2 percent reported earlier, business channel CNBC-TV18 said.
"As of now SBI and Cardif, our joint venture partner, both are divesting. We plan to come with an IPO in the first half of this financial year but much of it will depend upon the prevailing market conditions at that point of time," Dinesh Kumar Khara, MD of State Bank of India, told the channel.
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ICICI Prudential Life Insurance Company, the largest life insurer in the private sector, went public last year.
SBI has 70.1 percent stake in the venture, while BNP Paribas Cardif holds the remaining portion. Last December, SBI had sold 3.9 percent stake in the company to private equity firm KKR and Singapore government's Temasek Holdings for Rs. 1,794 crore, valuing SBI Life Insurance at about Rs. 46,000 crore.
For the financial 2016-17, SBI Life reported 11 percent rise in net profit to Rs. 955 crore from Rs. 861 crore in the preceding fiscal, while new business premium collection stood at Rs. 10,144 crore, up 43 percent.
"The overall FY 2016-17 has been excellent for the company including the last quarter (Q4) not only in terms of business but quality as well. With 39 percent growth in the Individual New Business premium (APE Basis), we have entered the 17th successful year of operation and command more than one fifth of the private life insurance market," Arijit Basu, MD & CEO, SBI Life, said in a statement last week.
Total assets under management (AUMs) rose 22 percent to Rs. 97,737 crore as on March 31, 2017 from Rs 79,828 crore as on March 31, 2016.
The 13th month persistency improved to 81.1 percent from 80.7 percent in the preceding fiscal.
ICICI Prudential Life Insurance shares were trading almost flat at Rs. 410 on the BSE at around 2.04 pm. The stock had hit a fresh 52-week high of Rs. 432.85. The BSE Sensex was down 95 points at 30,140.
The company's net profit rose by a marginal 1.9 percent to Rs. 1,681.66 crore for 2016-17 from Rs. 1,650.15 crore in the preceding fiscal, mainly due to a rise in net commission paid, from Rs. 619.98 crore in 2015-16 to Rs. 758.92 crore, according to its regulatory filing to the BSE.
Total net premium collection in 2016-17 stood at Rs. 22,155 crore, up 16.6 percent from Rs. 18,998 crore in fiscal 2016. The company declared a dividend of Rs. 3.50 per equity share, or 35 percent.
ICICI Prudential Life Insurance, a joint venture between private sector lender ICICI Bank and Britain's Prudential Holdings.
