BNP Paribas Cardif’s decision to raise its stake in SBI Life Insurance to 36% may help the private insurer at the time of listing two years later, SBI Life managing director and CEO Arijit Basu has said.
State Bank of India (SBI) will dilute 10% stake in its life insurance venture, where it currently holds 74% stake. After SBI’s stake dilution, BNP Paribas Cardif will increase its stake from 26% by buying the shares from the bank. The entire process is likely to happen within this fiscal.
“Raising of stake by the foreign partner may happen by the end of March, 2016, because a lot of things to be done before that. Valuation itself is a long-run process and we are doing it for the first time since inception,” Basu told FE.
Asked what would be advantage for SBI Life when BNP Caridif will increase its stake, he said, “Right now this may not change things very much on the ground, but later it may help at the time of listing and Cardif will feel more involved. They are very strongly engaged with the company. They do not look upon it as an investment.”
According to Basu, listing of the insurance company may happen after two years.