SBI Life announces IPO plans; SBI to dilute 10% stake

In a regulatory filling, India's largest lender, the State Bank of India (SBI) announced its strategy to liquidate 10 per cent of its stake in its life insurance venture- SBI Life through an initial public offering. The decision was approved by the board of the lenders in its central board executive committee meeting on March 24, 2017.

The bank will soon begin the process of the initial public offer of its stakes put on sale. While seeking the possibility of diluting 8 per cent stakes out of the total 10 per cent on offer for sale.

SBI Life Insurance, a joint venture between SBI and BNP Paribas Cardif, another insurance gaint. However, SBI owns 74 per cent stake in the insurance JV while BNP Paribas holds the remaining.

BNP dismissed the startegy of increasing its stake to 49 per cent in the joint venture, just before the announcement of the initial public offering, scheduled for next year.

SBI Life Insurance relishes an authorised capital of Rs 2,000 crore and a paid up capital of Rs 1,000 crore.

Meanwhile, in the previous year, SBI sold off 3.9 per cent of its stake in the insurance joint venture to a global private equity major - KKR and the Singaporean sovereign fund Temasek holdings for a sum of Rs 1,794 crore or USD 264 million, bringing down SBI's stake in the venture from 74 per cent to 70.1 per cent.

At present, SBI Life Insurance as the country's third largest private life insurer values around Rs 46,000 crore.

While, as on March 27, 2017, one of the leading insurance companies, ICICI Prudential Life is gaining on the stock market at Rs 375.20, up by 0.15 per cent.