SBI Life, the life insurance joint venture between the country's largest lender State Bank of India (SBI) and BNP Paribas Cardif, will sell 3.9 percent stake to private equity firms Singapore's Tamasek Holdings and KKR & Co for Rs 1,800 crore and has plans for public listing during next fiscal. The deal has pegged the company's valuations at Rs 46,000 crore, which is higher than its rival ICICI Prudential.
This has paved the way for SBI Life's listing in next financial year as the stake sale would provide a benchmark for future valuations.
"SBI Life is being valued at Rs 46,000 crore making it the most valuable company in the segment. The company is now looking forward to a public listing and the stake sale is a good benchmark. Depending on the market conditions, SBI Life Insurance will consider an IPO in 2017-18," Arijit Basu, managing director and chief executive officer of SBI Life, said.
In a filing to stock exchanges, SBI on Friday said its board had approved the divestment of 39 million shares in SBI Life at Rs 460 apiece. After completion of this transaction, SBI's stake in the life insurance arm will come down to 70.1 percent from the present 74 percent, while its joint venture partner, BNP Paribas Cardif, will continue to hold 26 percent in the company.
Most of the big insurance companies are planning to list in exchanges in coming years for sustaining their future business growth. In September this year, private sector life insurer ICICI Prudential got its shares listed in the bourses through raising Rs 6,057 crore from investors. The public issue had witnessed sound interest and was oversubscribed 10.48 times.
