SBI Life Insurance, a subsidiary of the country's largest lender State Bank of India Ltd., will offload 12 percent stake through its initial public offer (IPO) instead of the 10 percent planned earlier.
SBI will dilute 8 percent stake in the joint venture, while Cardiff will sell 4 percent via the IPO, the company said in a stock exchange filing on Friday. The life insurer is said to have picked Deutsche Bank and BNP Paribas as lead managers to the issue, Bloomberg reported.
Financials have been steadily improving over the last three years, the company had said in a media statement on May 3, with an 11 percent profit growth in financial year 2016-17. The management is hoping that strong growth will be received well by investors, Arijit Basu, managing director and chief executive officer of the company said in an interview with BloombergQuint on May 8.
"If you were to compare with the stake sales done by others in the industry, or even the ICICI Prudential IPO, we are broadly in line...if we are able to show better results, I think the market will react very positively and we should get a good valuation," he had said.
The government is also looking to make five state-owned general insurance companies public in the current financial year. SBI Life, however, will be the only life insurance company to list this year and the second since the government allowed foreign investors to increase stake in national insurers to 49 percent from 26 percent earlier. ICICI Prudential Life Insurance was the first to list in September 2016 after the norms were relaxed.
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