SBI offloads nearly 4% stake in life arm to Temasek and KKR for Rs 1,794 cr

Mumbai: State Bank of India (SBI) on Friday sold 3.9 percent stake in SBI Life for Rs 1,794 crore to Singapore sovereign fund Temasek and global private equity major KKR, valuing the life insurance firm at Rs 46,000 crore ahead of its plans to go public within a couple of years.

Both the partners will pick up equal stake in the third largest private life insurer, after HDFC Life (post merger with Max Life) and ICICI Prudential Life.

In October, SBI had informed the exchanges it was planning to dilute up to 5 percent to interested parties and that it was working towards taking SBI Life public over the next 18-24 months. SBI had also offered to shed 10 percent stake to its French joint venture partner BNP Group, at a right price.

Asked whether SBI would sell the remaining portion in the planned stake dilution, a senior company official said that it is unlikely in the current fiscal year.

SBI Life is a joint venture between the nations largest lender and French financial powerhouse BNP Paribas Cardif, which owns 26 per cent stake.

Post-transaction, SBIs stake in the life insurance firm will come down to 70.1 percent from current 74 percent, while BNP Paribas Cardif will continue to hold 26 percent.

In a statement, SBI said the executive committee meeting of its board has approved the sale of 3.9 crore shares of Rs 10 each, equalling a 3.9 percent stake in SBI Life for Rs 1,794 crore ($264 million).

It said an investment vehicle affiliated with the KKR- managed funds and an affiliate of Temasek will each purchase 1.95 crore share from the bank.

“We are happy to welcome KKR and Temasek as our incoming partners in SBI Life. The partnership with Temasek and KKR is a recognition of the efforts of SBI Life’s commitment to create a high-quality institution which is a leader amongst the close to two dozen private life insurers in the country,” SBI Chairperson Arundhati Bhattacharya said.

The valuation of SBI Life at Rs 46,000 crore reflects significant value creation since its inception in 2001, she added.

KKR India Chief Executive Sanjay Nayar said, “We look forward to supporting SBI Life’s long-term growth alongside these high-calibre partners, and are excited to enhance financial access for citizens across the country and promote development of a more inclusive financial services industry.”