New Delhi: The country's largest lender State Bank of India on Thursday approved the sale of 4 percent stake in SBI General Insurance for Rs 482 crore to two alternative investment funds (AIFs).
The executive committee of SBI at its meeting held on Thursday approved the sale of 86.2 lakh shares of Rs 10 each, equalling to 4 percent stake in its subsidiary SBI General Insurance Company Ltd (SBI GI), for Rs 482 crore (around $66 million), SBI said in a release.
Axis New Opportunities AIF-I and PI Opportunities Fund-I, an AIF of Premji Invest, will purchase 1.65 percent and 2.35 percent stake, respectively, from SBI.
The proposed transaction values SBI GI at over Rs 12,000 crore. The deal is subject to regulatory approvals, said SBI.
After completion of the transaction, SBI will hold 70 percent stake in SBI GI, while its joint venture partner IAG International Pty Ltd will continue to hold 26 percent.
"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.
SBI General Managing Director & Chief Executive Officer Pushan Mahapatra said the company is the fastest-growing general insurer in the private sector.
"The company is in just 7th years into operations and has already achieved sizeable scale, making it the seventh-largest private general insurance player as at the end of June 2018," Mahapatra said.
Kotak Mahindra Capital Company was the financial advisor for the transaction, while J Sagar Associates was the legal advisor.
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Updated Date: Nov 29, 2018 19:49:19 IST