SBI Life has filed the IPO documents with Sebi to raise around Rs 6,000-7,000 crore, in which promoters SBI and France's BNP Paribas Cardif (BNPPC) will sell 12 per cent stake of the company.
"The life insurer is expected to raise about Rs 6,000- 7,000 crore through this IPO (initial public offer)," according to investment banking sources.
Individually, SBI will dilute 8 per cent and BNP Paribas Cardif 4 per cent in the join venture company -- SBI Life.
This will make a gross dilution of 120 million (12 crore) equity shares by both the shareholders, according to the draft red herring prospectus (DRHP) filed with Sebi.
"Initial public offer of up to 120,000,000 equity shares of face value of Rs 10 each of SBI Life Insurance Company Ltd for cash at a price aggregating up to ... Through an offer for sale by State Bank of India and BNP Paribas Cardif SA (selling shareholders) of up to 80 million (8 crore) equity shares and up to 40 million (4 crore) equity shares respectively," as per the DRHP document filed by SBI Life.
SBI Life Insurance (SBI Life) is a joint venture between India's largest lender State Bank of India (SBI) and BNP Paribas Cardif-- insurance holding company of France.
At present SBI holds 70.10 per cent in SBI Life and BNPPC 26 per cent. Minority shareholders Value Life Pte, an affiliate of KKR Asian Fund and MacRitchie Investments Pte, a wholly owned subsidiary of Temasek Holdings hold 1.95 per cent each.
Explaining the rationale behind the IPO, SBI Life said the company wants to achieve the benefits of listing equity shares on the stock exchanges.
"The listing of equity shares will enhance the 'SBI Life' brand name and provide liquidity to the existing shareholders. The listing will also provide a public market for equity shares in India.
"Our company will not receive any proceeds from the offer," it added.