Private equity firms Premji Invest and Warbug Pincus are likely to buy 26 percent stake in SBI General Insurance from Insurance Australia Group (IAG), people aware of the development told CNBC-TV18.
Of the 26 percent held by the Australian insurance company, 16.1 percent is likely to be acquired by Premji Invest and the rest 9.9 percent by Warbug Pincus.
The deal could be completed within the next 10 days.
After the completion of the deal SBI will hold 70 percent, Premji Invest 16.1 percent, Warbug Pincus 9.9 percent, and Axis AIF will have 1.65 percent stake in SBI General Insurance.
Insurance Australia Group is expected to raise Rs 3,120-3,250 crore by selling its entire 26 percent stake, said sources. The transaction will value SBI General Insurance at around Rs 12,000-12,500 crore.
IAG’s move to sell its stake in the insurance joint venture follows a 4 percent stake sale in the insurance company by SBI. In September, SBI sold 4 percent stake in SBI General Insurance to Axis AIF and Premji Invest for Rs 482 crore.
SBI General Insurance started operations in 2010 and sells products ranging from motor, health, travel and home insurance in the retail space to aviation, fire, marine and liability insurance in the commercial space.
The SBI General Insurance stake sale will help in price discovery ahead of a planned Initial Public Offering (IPO) in FY21.
First Published: IST