SBI Life Rs 8,400 crore IPO subscribed 57% on day 2; QIB portion oversubscribed 58%

SBI Life Insurance Rs 8,400 crore IPO (initial public offer), a subsidiary of the country’s largest lender SBI, which opened on Wednesday got subscribed 57.44% at the end of day 2 of bidding.

SBI Life Insurance Rs 8,400 crore IPO (initial public offer), a subsidiary of the country’s largest lender SBI, which opened on Wednesday got subscribed 57.44% at the end of day 2 of bidding. The initial share sale offer will remain open until 22 September. The shares reserved for QIB (qualified institutional buyers) was subscribed 1.58 times, the portion set aside for NII (non-institutional investors) was subscribed 8.2% while the shares reserved for retail investors got subscribed 37.4%. The quantum reserved for employees category was subscribed 44.72% and shares locked for other shareholders got subscribed 11.34% at the end the second day of bidding.

This would be the second listing of a life insurer after ICICI Prudential Life Insurance, which went public last year. The price band for the public offer has been fixed between Rs 685 to Rs 700 per share of face value Rs 10 each. At the upper end of the price band, the company is expected to raise about Rs 8,400 crore. SBI Life’s Rs 8,400 crore IPO is the largest public offer in last seven years and the biggest after Coal India’s Rs 15,200 crore share sale.

Anchor investors

SBI Life Insurance Company has raised Rs 2,226 crore from anchor investors as its initial share sale opened for public subscription today. BlackRock, Canada Pension Fund, Government of Singapore, Abu Dhabi Investment Authority, HSBC, HDFCMF, ICICI Prudential MF, Kotak MF, Reliance MF, Axis MF and UTI MF are among the 69 anchor investors. The insurer would allot 3.18 crore shares to 69 anchor investors at an average price of Rs 700, garnering Rs 2,226 crore to the company, SBI Life informed to the exchanges.

IPO details

SBI Life has allocated 2,12,00,000 shares for QIB’s (qualified institutional buyers); 1,59,00,000 shares for NII (non-institutional investors); 3,71,00,000 shares for retail investors. The quota set aside for employees is of 20,00,000 shares and for other shareholders is 1,20,00,000 shares. Investors can bid for the IPO with a minimum of 21 shares. 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 will dilute up to 8 crore shares while BNP Paribas Cardif SA will offload up to 4 crore. 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.

IPO proceeds

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 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.

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