SBI Life Insurance, a subsidiary of the country's largest lender State Bank of India, will make its stock market debut on Tuesday after raising Rs 8,400 crore in its initial public offering.
The company sold up to 12 crore equity shares at the upper end of the price band of Rs 700 apiece. The IPO was an offer for sale with SBI selling 8 percent stake and its joint venture partner BNP Paribas Cardif divesting 4 percent. SBI's holding will come down from 70.10 percent to 62.1 percent, while BNP Paribas Cardif's stake will fall from 26 per cent to 22 percent.
JM Financial Institutional Securities Ltd., Axis Capital Ltd., BNP Paribas, Citigroup Global Markets India Pvt., Deutsche Equities India Pvt., ICICI Securities Ltd., Kotak Mahindra Capital Company Ltd., and SBI Capital Markets Ltd. were the book running lead managers to the issue.
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Qualified institutional buyers and non-institutional bidders put in bids for 12.56 and 0.70 times the shares on offer, respectively. The portion reserved for retail buyers was subscribed 0.85 times. Shares reserved for employees witnessed bids for 1.03 times the number of shares on offer, while the shareholder segment saw a subscription of 0.38 times. At the issue price, SBI Life will command a valuation of Rs 70,000 crore, according to BloombergQuint's calculations.
The embedded value, the consolidated value of shareholders' interest in the business, rose 32 percent in the year to March. At the upper end and lower end of the price band, the stock will trade at 4.23 times and 4.14 times its embedded value, respectively.
SBI Life offers 37 individual and group plans, ranging from term to unit-linked policies. Its income from investments rose 178 percent to Rs 9,295 crore in the year-ended March, largely on the back of Rs 5,527 crore gains on its unit-linked plans. ULIPs offer life cover through a mix of insurance and investment in stocks.
Also Read: SBI Life IPO: Here's What You Need To Know
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