SBI Life dips 4% as Canada Pension Plan offloads partial stake

Shares of SBI Life Insurance Company slipped 4 per cent at Rs 1,171 on the BSE in the intra-day trade on Thursday after the Canada Pension Plan Investment Board (CPPIB) offloaded 2 per cent stake in the life insurance company via open market today.

At 09:15 am, around 23.4 million equity shares, representing 2.34 per cent equity of SBI Life Insurance Company, changed hands via block deals on the BSE, the exchange data shows.

According to terms of the deal obtained by Bloomberg, the Canada Pension Plan Investment Board (CPPIB) planned to offload 2 per cent stake in SBI Life Insurance Company on Thursday. The shares were to be offered in the range between Rs 1,159 and Rs 1,220 per share. At the top end, the share sale would fetch Rs 2,440 crore, the report suggested. The names of the buyers, however, could not be ascertained immediately.

As of June 30, 2021, the Canadian investment manager held 28.58 million, or 2.86 per cent stake, in the SBI Life Insurance, the shareholding pattern data shows.

Earlier, on August 5, 2021, US private equity fund CA Emerald Investments, an affiliate of Carlyle Asia Partners, offloaded its entire 1.9 per cent stake in the company via multiple block deals.

State Bank of India (SBI), the promoter of the company holds 55.5 per cent stake in SBI Life. Among public shareholders, the Government of Singapore owns 2.69 per cent stake, followed by Carlyle (1.9 per cent) and ICICI Prudential Life Insurance (1.36 per cent).

The stock of SBI Life had hit a record high of Rs 1,254 on September 3, 2021. In the past three months, the stock has outperformed the market by surging nearly 20 per cent, as compared to a 12 per cent rise in the S&P BSE Sensex.

SBI Life reported healthy growth in value of new business (VNB) in April-June quarter (Q1FY22), up 45 per cent year on year (YoY) (but down 61 per cent quarter on quarter) to Rs 340 crore. Annualized premium equivalent (APE) grew 27 per cent YoY to Rs 1,620 crore. AUM growth was also healthy at 32 per cent YoY to Rs 2.3 trillion.

Further, in NBP, SBI Life maintained leadership among private players with an 18.9 per cent market share. "We continue to like SBI Life, considering the gradual shift to a profitable product mix, relatively comfortable valuations, steady growth and favorable risk-reward," analysts at Emkay Global Financial Services had said in a result update.