SBI has sold a 4% stake in SBI General Insurance, which is the non-life insurance arm of the lender and has, as a result, raised a sum of Rs.482 crore. The public-sector lender sold its stake to Premji Invest and Axis New Opportunities Fund.
The board members of State Bank of India approved the sale of around 86.2 lakh shares that have a value of Rs.10 apiece. Of the shares that are put on offer, PI Opportunities Fund – I, which is an alternative investment fund of Premji Invest will be purchasing a 2.35% stake from the public sector bank, while Axis New Opportunities alternative investment fund will be purchasing a 1.65% stake in the general insurance firm.
After the completion of this transaction, State Bank of India’s stake in SBI General Insurance will reduce from 74% to 70%. Insurance Australia Group International Pty. Ltd. will continue to retain its 26% stake in the company. SBI General Insurance, which commenced operations in the year 2010, was formed in a 74:26 partnership between SBI and Insurance Australia Group.
The financial advisor for this transaction was Kotak Mahindra Capital Company Limited, while J. Sagar Associates was the legal advisor.
As on June 2018, SBI General Insurance was the seventh-biggest private general insurance company in India. The insurance firm was valued at above Rs.12,043 crore. Between FY13 and FY18, the insurance company has grown at a compound annual growth rate (CAGR) of 36% and has a gross direct premium of around Rs.3,500 crore.
SBI General Insurance, which doubled its profit in just one year, reported a profit to the tune of Rs.396 crore in FY18, in comparison to a profit of Rs.153 crore in the last fiscal.
Sources: The Economic Times, The Times of India