June 19, 2021

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State Bank of India to sell 5% stake in SBI Life

State Bank of India which is India’s largest public sector bank is in talks with global sovereign wealth funds and strategic investors to sell up to 5% stake in SBI Life, the life insurance joint venture with BNP Paribas Cardiff in a pre-IPO fund raise, pegging its valuation at Rs 37,000-40,000 crore.

The life insurer, that is looking to go public next year, has appointed investment bank Kotak Mahindra Capital Co. to look for buyers, The process has been kick-started and Information Memorandum, or IMs, have been sent out to prospective buyers.

State Bank of India announced that the bank plans to bring its insurance arm SBI Life insurance for initial public offering (IPO) within 18-24 months.

Till now ICICI Prudential Life Insurance is only insurance company which has opted for IPO market. It raised around Rs 6000 crore from it.

When ICICI Prudential Life Insurance launched its Rs6,057 crore IPO last month, it managed to sell shares to investors at a valuation of Rs47,955 crore.

“India’s life insurance sector is the biggest in the world with about 360 million policies which are expected to increase at a Compound Annual Growth Rate (CAGR) of 12-15% over the next five years. The insurance industry plans to raise penetration levels to 5% by 2020,”