State Bank of India will sell upto five per cent stake in SBI Life Insurance to non-promoter entity for price discovery for and monetise holding.
The country's largest lender expects to complete sale process in this financial year. This transaction would help to discover pricing for life insurer which would be listed in the future, Senior SBI executives.
The Executive Committee of the Central Board (ECCB) (on October 14, 2016) approved to dilute upto five per cent stake of SBI in SBI Life to a non-promoter entity, SBI informed the stock exchange today.
The merchant banking sources said SBI Life Insurance had announced its embedded value as Rs 12,999 crore on March 31, 2016. The promoter (SBI) may seek atleast 2.5-three times the embedded vale as a valuation for insurance company.
The recent listing of ICICI Prudential Life and Max Life's acquisition by HDFC Standard Life would guide the pricing for SBI's stake.
SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas Cardif. SBI owns 74 per cent of the total capital and BNP Paribas Cardif the remaining 26 per cent. BNP Paribas Cardiff will raise its stake in the company by 10 per cent to 36 per cent.