SBI Life Insurance IPO aims for Rs70,000 crore valuation

Image used for representational purpose

Image used for representational purpose

Together with its partner BNP Paribas, SBI has invested Rs 1,000 crore in the company since its launch in 2002. Ltd and SBI Capital Markets Ltd to manage the IPO. Ltd raised Rs6,000 crore in an initial share sale, the first public offering by an Indian life insurer. "In IPO, you have greater liquidity and so the valuation is higher than a minority stake sale in a private deal", said Arundhati Bhattacharya, chairman, State Bank of India at a press conference on Wednesday.

SBI Life will become the second life insurer to go public after the listing of ICICI Prudential Life Insurance previous year. Last year, ICICI Prudential Life Insurance Co. ICICI Lombard, a unit of ICICI Bank, is set to open its 57 billion-rupee IPO for subscription this week. Arijit Basu, managing director and chief executive officer, SBI Life said, this was pure divestment and at this moment, the company had adequate capital which was sufficient for the next three years.

SBI Life Insurance has appointed JM Financial Institutional Securities Ltd, Axis Capital Ltd, BNP Paribas, Citigroup Global Markets India Pvt. When asked whether the bank would divest stake in its non-life subsidiary SBI General through an IPO, Bhattacharya said that the company would look at a more mature business and the non-life company was only seven years old. The new rules allow foreign companies to own as much as 49% stake in local insurance ventures, up from 26%. According to a report by brokerage K.R. Choksey, India's insurance industry is set to grow almost four-fold to $280 billion by 2020. Overseas investors pumped in $6.2 billion into local stocks so far this year.

Shares of SBI were little changed in Mumbai trading, while the benchmark S&P BSE Sensex gained 0.09%.

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