The board of State Bank of India (SBI) on Wednesday approved the divestment of up to 4.5 per cent stake in SBI Life Insurance through an offer for sale (OFS) route.
The stake sale will fetch around Rs 3,595 crore at the current market price of SBI Life.
The executive committee of the central board (ECCB) of SBI in its meeting held today gave its nod to the stake sale decision, SBI said in a regulatory filing on Wednesday.
“SBI proposes to sell up to 3.50 crore equity shares, in aggregate representing 3.50 per cent of the total issued and paid-up equity share capital of SBI Life Insurance on September 12 (for non-retail investors only) and on September 13 (for retail investors and for non-retail investors who choose to carry forward their un-allotted bids) with an option to additionally sell up to one crore equity shares (representing 1.00 per cent of the total issued and paid-up equity share capital of the company),” SBI Life said. In the event the oversubscription is exercised, the equity shares forming part of the base offer size and the oversubscription option will in aggregate be referred to as the “sale shares”.
However, in the event such oversubscription is not exercised, the equity shares forming part of the base offer size will be referred to as the “sale shares” through the separate designated window of the BSE and the NSE, it said.
SBI LIfe’s asset under management (AUM) stood at Rs 1.47 lakh crore as on June 30, up 22 per cent from Rs 1.20 lakh crore a year earlier. The private equity firm Carlyle Group in March this year had acquired 9.25 per cent stake of the SBI Life from co-promoter group BNP Paribas Cardiff for a deal worth nearly Rs 5,500 crore.
SBI Life recorded a rise of 5 per cent in its net profit to Rs 371.90 crore in the first quarter ended June 30 in FY20. The firm’s net profit during the same quarter of the previous financial year ended March 2019 stood at Rs 354.31 crore.
The gross written premium during the first quarter of FY20 grew 41 per cent to Rs 6,690 crore in comparison to Rs 4,760 crore a year ago. SBI shares closed the intraday trade at Rs 285.30 or 2.66 per cent on the NSE. SBI Life shares closed 1.13 per cent lower at Rs 798.75 on the BSE.