State Bank of India has decided to sell 3.9 per cent stake in its
subsidiary SBI Life Insurance Company Ltd (SBI Life) for ₹1,794 crore
($264 million).
A bank statement said an investment vehicle affiliated with KKR-managed
funds and an affiliate of Temasek, the Singapore-based investment
company, will each purchase 1.95 crore shares from it.
This is the second major divestment in the insurance segment after the
Centre raised the maximum permissible shareholding of foreign investors
in insurance companies from 26 per cent to 49 per cent. ICICI Bank had
also sold a small stake in its life insurance subsidiary last year.
On Friday Dec09,2016, the Executive Committee of the Board of SBI approved the sale
of 3.9 crore shares of ₹10 each. The proposed transaction values SBI
Life at ₹46,000 crore (at ₹460 per share).
Upon completion of the transaction, SBI will hold 70.1 per cent stake in
SBI Life, while its joint venture partner, BNP Paribas Cardif, will
continue to hold 26 per cent, the statement said.
SBI Chairman Arundhati Bhattacharya said, “The partnership with KKR and
Temasek is a recognition of the efforts of SBI Life’s commitment to
create a high-quality institution which is a leader in the private
Indian Life Insurance space.” “Moreover,” she added, “this transaction
values SBI Life at ₹46,000 crore, reflecting significant value creation
since its inception in 2001.”
SBI Life earned ₹7,107 crore and ₹4,640 crore of new business premium
during FY2016 and H1FY2017, respectively. The company has a 22 per cent
private sector market share in terms of new business premium.
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