SBI Life looks to raise about Rs8,400 cr via stake sale; IPO opens today

20 Sep 2017

SBI Life, a subsidiary of state-run lender State Bank of India, will open its initial public offer of equity shares today, expecting to raise nearly Rs8,400 crore (about $1.3 billion).

The SBI Life IPO comes a day after ICICI Lombard General Insurance Company's Rs 5,700-crore initial public offer was oversubscribed 2.97 times on the last day of the bidding on Tuesday.

The SBI Life's IPO sale, which opens today (20 September), will close on 22 September, according to a stock market filing.

SBI Life's two main shareholders - State Bank of India and BNP Paribas Cardif - are paring their stakes through the IPO sale.

While State Bank of India is selling up to 8 per cent stake, or 80 million shares, in SBI Life, BNP Paribas Cardif is selling up to a 4 per cent stake, or 40 million shares.

SBI Life's IPO is the biggest since state-run Coal India's Rs15,500 crore ($2.4 billion) IPO in 2010.

At the IPO price band of Rs685-700, the stock is available at P / IEV multiple of 4.2x FY17 (post issue) at the upper end of the price band. Post issue market capitalisation is at around Rs70,000 crore.

The issue is being offered at 4.2 times its embedded value of Rs16,538 crore, which is a little higher than 3.8 times for ICICI Prudential.

SBI Life Insurance Company Ltd is the India's largest private life insurer in terms of new business premium (NBP) generated in each fiscal year since FY10. The company claims to have increased its market share of NBP generated among private life insurers in India, from 15.9 per cent in FY15 to 20 per cent in FY17.