SBI Life hits new high after Carlyle affiliate offloads entire 1.9% stake

Around 19.24 million equity shares, representing 1.92 per cent of the total equity of SBI Life had changed hands on the BSE till 10:55 am

Shares of SBI Life Insurance Company hit a record high of Rs 1,174, up 3 per cent on the BSE in intra-day trade on Thursday after 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. The stock of the life insurer surpassed its previous high of Rs 1,147.95 touched on July 29, 2021.

At 10:55 am, SBI Life traded 1.2 per cent higher at Rs 1,150.45 on the BSE, as compared to a 0.14 per cent decline in the S&P BSE Sensex. Around 19.24 million equity shares, representing 1.92 per cent of the total equity of SBI Life changed hands on the BSE, the exchange data shows. The stock also hit a low of Rs 1,126.60 in intra-day trade today.

The price range for the share sale had been set at Rs 1,130-Rs 1,136.85, according to a term sheet. The upper end is SBI Life’s closing price on the BSE on Wednesday. At the lower end, Carlyle will be able to raise Rs 2,147 crore. BofA Securities India is the investment bank handling the share sale, Business Standard reported. CLICK HERE FOR FULL REPORT

In 2019, Carlyle had bought a 9 per cent stake in SBI Life from BNP Paribas for about Rs 5,500 crore. Later in November 2019, Carlyle offloaded 3 per cent stake at Rs 938 per share to raise Rs 2,814 crore. Then in May this year, Carlyle had sold 4.2 per cent stake in SBI Life at Rs 960 per share to raise Rs 4,061 crore.

Currently, the State Bank of India (SBI), the promoter, holds 55.5 per cent stake in SBI Life and BNP Paribas Cardiff holds 0.2 per cent stake.

In the past one month, the stock of SBI Life has outperformed the market by gaining 15 per cent, as compared to a 2.7 per cent rise in the S&P BSE Sensex.

For the April-June 2021 quarter (Q1FY22), SBI Life reported healthy growth in value of new business (VNB), up 45 per cent year-on-year (YoY) (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. In NBP, SBI Life maintained leadership among private players with an 18.9 per cent market share.

Analysts at Emkay Global Financial Services said they continue to like SBI Life, considering the gradual shift to a profitable product mix, relatively comfortable valuations, steady growth and favourable risk-reward. The brokerage firm maintained ‘buy’ with overweight with a target price of Rs 1,230 per share.