SBI Life's $1.3 billion IPO opens tomorrow
The IPO, which has a price band of Rs 685 to Rs 700 per share for its Rs 8400 crore initial public offering (IPO), is expected to be the largest in the insurance space as of today.
September 19, 2017 / 17:35 IST
On September 20, the capital market will see India's first billion-dollar initial public offering (IPO) since 2010. SBI Life Insurance, a subsidiary of the country's largest lender SBI, will hit the market on to raise up to Rs 8,400 crore.
The initial share sale offer will open on September 20 and close on September 22, SBI said in a regulatory filing to the stock exchanges last week.
The IPO, which has a price band of Rs 685 to Rs 700 per share, is expected to be the largest in the insurance space as on Tuesday.
The insurer is a joint venture between State Bank of India (SBI) and BNP Cardif which will dilute 8 percent and 4 percent, respectively.
HDFC Securities in a report said that the insurer's profit after tax increased at a CAGR of 8.24 percent from Rs 8,148.67 million in FY15 to Rs 9,546.53 million in FY17 and was Rs 3,134.48 million for the three months ended June 30, 2017. It turned profitable within the first five years of its operations and has declared dividends every year since FY12.
This IPO includes an initial public offer of up to 120 million equity shares of face value of Rs 10 each through an offer for sale by State Bank of India and BNP Paribas Cardif where each will be selling up to 80 million equity shares and up to 40 million equity shares, respectively.
The book-running lead managers to the offer are JM Financial Institutional Securities Limited, Axis Capital Limited, BNP Paribas, Citigroup Global Markets India Private Limited, Deutsche Equities India Private Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited.
In FY17, SBI Life's embedded value was Rs 16,537.9 crore as of March 31, 2017. Their value of new business was Rs 1,037 crore while annualised premium equivalent stood at Rs 6727 crore for FY17.
At present, ICICI Prudential Life Insurance is the only insurance company to be listed on the Indian stock exchanges. It made a debut last year with a Rs 6000 crore IPO.
Another insurance IPO, ICICI Lombard General Insurance company's Rs 5,700-crore initial public offering has been oversubscribed 2.94 times on Tuesday (the final day), as per data available on exchanges. The IPO received bids for over 18.13 crore equity shares against issue size of 6.16 crore shares (excluding anchor investors' portion).
