SBI Life Insurance Company has filed a Draft Red Herring Prospectus (DRHP) with capital market regulator SEBI for launching its initial public offer (IPO). In a statement to stock exchanges, SBI (State Bank of India) said the upcoming IPO will include sale of up to 120,000,000 equity shares. While pricing for SBI Life Insurance IPO is yet to be ascertained, it is believed that the public offer will be close to INR6,000 crore (INR60 billion).
The shares will be sold through an offer for sale (OFS) by SBI and BNP Paribas Cardif. The public sector bank aims to sell 80,000,000 shares while its partner plans to offload 40,000,000 shares. The shares will amount to 12% of the life insurance company’s paid-up share capital. SBI Life Insurance is a joint venture with SBI as a majority shareholder of 70% while 26% is owned by BNP Paribas Cardif. The remaining shares are held by Singapore sovereign fund Temasek and private equity (PE) house KKR which are relatively new investors in the company which was incorporated in 2000.
Out of the total, up to 2,000,000 shares will be reserved for eligible employees at a discount on the offer price. Another 12,000,000 shares will be earmarked for purchase by SBI shareholders.
SBI Life Insurance IPO will be managed by JM Financial Institutional Securities Limited, Axis Capital Limited, BNP Paribas, Citigroup Global Markets India Private Limited, Deutsche Equities India Private Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited.
Barrage of insurance IPOs
SBI Life Insurance will be the second life insurance company to get listed on stock exchanges in India. Last year, ICICI Prudential Life Insurance became the first life insurer to get listed following its INR6,000 crore IPO. Although the IPO was well received by investors, it had a lackluster listing.
Nevertheless, ICICI Prudential has paved way for more insurance IPOs. Last week, ICICI Lombard General Insurance filed its draft prospectus while several others are preparing ground for their IPOs. Included among these are five government-owned general insurance companies – New India Assurance Company, United India Insurance, Oriental Insurance Company, National Insurance Company and reinsurer General Insurance Corporation of India (GIC). In the life insurance space, Canara HSBC Oriental Bank of Commerce Life Insurance, Aviva India Life Insurance and Max Bupa Health Insurance are known to be preparing for their public listings.