SBI Life Insurance makes muted debut, ends 1% up

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Mumbai | Published: October 4, 2017 3:43:01 AM

SBI Life Insurance Company made a tepid debut on the bourses on Wednesday with the shares closing the session just 1% higher at Rs 707.55 on the National Stock Exchange (NSE) compared with the issue price of Rs 700.

sbi, sbi insurance, sbi insurance market performance, market sbiSBI chairman Arundhati Bhattacharya (right) and Arijit Basu, MD and CEO of SBI Life, (left) during the listing of SBI Life Insurance in Mumbai on Tuesday. (Prashant Nadkar)

SBI Life Insurance Company made a tepid debut on the bourses on Wednesday with the shares closing the session just 1% higher at Rs 707.55 on the National Stock Exchange (NSE) compared with the issue price of Rs 700.

The stock listed at a 5 % premium over the issue price of Rs 700 and saw an intra-day high of Rs 738 and a low of Rs 702.25 on the BSE. The shares closed at Rs 708, up 1.14 % over the issue price. On the NSE, the stock listed at Rs 735 and touched an intra-day high of Rs 740 and a low of Rs 701.70.

The initial public offering of SBI Life Insurance was subscribed 3.58 times on the concluding day of the issue with investors bidding for 31.54 crore shares of the 8.82 crore shares on offer. The issue received bids for 26.63 crore shares from qualified institutional buyers of their quota of 2.12 crore shares.

SBI Life Insurance Company’s Rs 8,400 crore initial public offer was opened for subscription during September 20-22, with a price band of Rs 685-700 per share. Established as a joint venture between the State Bank of India and BNP Paribas Cardif in 2001, SBI Life Insurance company is India’s largest private life insurer in terms of new business premium generated in each fiscal year since 2010. Currently, SBI holds 70.1% in SBI Life, while BNP Paribas Cardif has 26% and remaining 3.9% is owned by KKR and Temasek Holdings. So now, 12% is being offloaded and after IPO, SBI and BNP Paribas Cardif will hold 62.1% and 22% respectively.

As of July 3, the company had a comprehensive product portfolio of 37 individual and group products, including a range of protection and savings products to address the insurance needs.

The company has developed a multi-channel distribution network comprising an expansive bancassurance channel as well as other distribution channels including direct sales and sales through corporate agents, brokers, insurance marketing firms and other intermediaries.

The size of the Indian life insurance industry is Rs 4.2 lakh crore on a total-premium basis as of fiscal 2017. In terms of total premium, the Indian life insurance industry is the 10th largest market in the world and the fifth largest in Asia.

New premium constituted 42% of the total premium as of fiscal 2017. The industry’s assets under management (AUM) grew at a compound annual rate (CAGR) of 19% during fiscal 2001 to fiscal 2017 to `30 lakh crore.

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