MUMBAI: SBI Life Insurance is planning to raise up to Rs 8,400 crore via its IPO, which will begin next Wednesday. This will be the second listing of a life insurer after ICICI Prudential Life Insurance, which went public last year raising over Rs 6,500 crore. The price band for the proposed IPO has been fixed between Rs 685 and Rs 700 per share of Rs 10 each. The private insurer’s initial share sale offer will opn on September 20 and close on September 22.
SBI Life’s public issue involves its promoters offloading up to 12 crore shares of face value of Rs 10 each through the offer for sale route. It means SBI will dilute up to 8 crore shares, while BNP Paribas Cardif SA will offload up to 4 crore. Following the IPO, SBI’s stake will stand at 62.1 per cent, while Cardif will hold 22 per cent and the remaining will be with minority shareholders.
“SBI Life is a market leader for over eight years based on the business premium. It has the lowest mis-selling ratio in the industry and its persistency ratio is far superior than the others,” said SBI chairperson Arundhati Bhattacharya. The capital raised will go back to the promoters.
While she ruled out SBI General Insurance IPO in the near-term, SBI will not take long to unlock value of other subsidiaries. “Yes, we have taken 23 years to come back to the market again. But, I can assure you it won’t take that long for the next our offspring to come to the market,” she said.
According to Arjit Basu, managing director & CEO, SBI Life Insurance, the proposed IPO is a pure divestment and the company has adequate capital, which is sufficient for the next three years. “The capital requirement is adequate and we will not require any more funds for the next three years. This is pure divestment,” Basu added. Going forward, the company will focus on protection products including critical illness.