After listing its life insurance business two years ago, the State Bank of India (SBI) is again looking to hit the capital market, this time with an initial public offering (IPO) for its general insurance business. The state-run lender is planning to launch its IPO in the last quarter of the current financial year, sources familiar with the matter told CNBC-TV18.
The bank is likely to raise Rs 1,500-1,800 crore through an approximate dilution of its 10 percent stake in SBI General Insurance. Currently, SBI owns 70 percent, while insurance Australia Group owns 26 percent and Axis New Opportunities Fund and Premji Invest together own 4 percent stake in the insurance arm of the state-run lender.
The IPO transaction is expected to value SBI General Insurance at Rs 15,000-18,000 crore. The previous transaction under which SBI sold 4 percent of its stake to Axis New Opportunities Fund and Premji Invest valued SBI General at around Rs 12,000 crore
SBI General Insurance’s IPO is not the only transaction which would keep the company in limelight. According to sources, Its foreign partner, Insurance Australia Group may also look at selling part or entire 26 percent stake in SBI General Insurance by the third quarter of the current financial year. Insurance Australia Group has already started the stake sale process and has received bids from some prominent private equity players, sources said, requesting anonymity.
SBI is yet to reply to CNBC-TV18’s query.
First Published: IST