1. SBI Life Rs 7,000 crore IPO likely next week: 4 key takeaways

SBI Life Rs 7,000 crore IPO likely next week: 4 key takeaways

SBI Life has received capital market regulator SEBI's approval to raise an estimate of Rs 6,500-7,000 crore through its initial public offering. We take a look at four things to watch ahead of SBI Life IPO.

By: | Updated: September 12, 2017 1:40 PM
SBI Life’s public issue involves its promoters offloading up to 12 crore shares of face value of Rs 10 each through the offer of sale route. (Image: Reuters)

SBI Life has received capital market regulator SEBI’s approval to raise an estimate of Rs 6,500-7,000 crore through its initial public offering. The company had filed its draft red herring prospectus (DRHP) with SEBI in July and got “observations” from the regulator on 4 September which is very necessary for any company to launch a public offer. Earlier last week, a newspaper report has said that SBI Life IPO will open on 20 September 2017.

IPO details

SBI Life’s public issue involves its promoters offloading up to 12 crore shares of face value of Rs 10 each through the offer of sale route. State Bank of India (SBI) will dilute up to 8 crore shares while BNP Paribas Cardif SA will offload up to 4 crore. SBI Life is looking at raising Rs 6,500-7,000 crore through the issue, PTI reported citing unidentified sources. The book running lead managers to the offer are JM Financial Institutional Securities, Axis Capital, BNP Paribas, Citigroup Global Markets India, Deutsche Equities India, ICICI Securities, Kotak Mahindra Capital Company and SBI Capital Markets.

Proceeds of Issue

Explaining the rationale behind the IPO, SBI Life said the company wants to achieve the benefits of listing equity shares on the stock exchanges and to carry out the sale of up to 12 crore equity shares by the selling shareholders. The listing will enhance the “SBI Life” brand name and provide liquidity to the existing shareholders and our company will not receive any proceeds from the offer, it added.

Company profile

SBI Life Insurance (SBI Life) is a joint venture between India’s largest lender SBI and BNP Paribas Cardif (BNPPC) — the insurance holding company of France. SBI holds 70.1% and BNPPC 26% in SBI Life respectively. Minority shareholders Value Life Pte, an affiliate of KKR Asian Fund and MacRitchie Investments Pte, a wholly-owned subsidiary of Temasek Holdings, hold 1.95% each.

Insurers line up for IPOs

Besides, three insurance players — HDFC Standard Life Insurance Company, General Insurance Corporation of India (GIC Re) and New India Assurance Company — are awaiting SEBI’s nod to float their respective IPOs, showed the latest update with the markets regulator. SEBI has sought “clarifications” from the insurance watchdog IRDAI (Insurance Regulatory and Development Authority of India) with regard to initial share sale offer of HDFC Life. Besides, clarifications are awaited from merchant bankers of (GIC Re) regarding its IPO while draft offer documents of New India Assurance are currently “under process”.

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