State Bank of India recently approved the sale of 4 per cent stake in SBI General Insurance for Rs 482 crore to two alternative investment funds (AIFs).
The executive committee of SBI approved the sale of 86.2 lakh shares of Rs 10 each, equaling to 4 per cent stake in its subsidiary SBI General Insurance Company Ltd
for Rs 482 crore (around USD 66 million), SBI said.
New Opportunities AIF-I and PI Opportunities Fund-I, an AIF of Premji Invest, will purchase 1.65 per cent and 2.35 per cent stake, respectively, from SBI. The proposed transaction values SBI GI at over Rs 12,000 crore.
After completion of the transaction, SBI will hold 70 per cent stake in SBI GI, while its joint venture partner IAG International Pty Ltd will continue to hold 26 per cent.
“Insurance segment is still young and nascent in India, it is an under penetrated market, we foresee a significant scope of growth for SBI GI to achieve size, scale and profitability,” said SBI Chairman Rajnish Kumar.
This transaction values SBI GI at around Rs 12,000 crore, reflecting significant value creation within 7 years of business operations, Dinesh Khara, Managing Director, Global Banking and Subsidiaries, said.