BNP Paribas on Thursday ruled out increasing its stake in SBI Life to 49 per cent ahead of the proposed initial public offering slated for next year.
"We have no plans as of now to increase our stake in SBI Life from 26 per cent. We are very happy with the way the company is performing and we will see what can be done closer to the IPO. As of now we are very happy with what we have in the joint venture," BNP Paribas group executive committee member Thierry Laborde said here.
BNP Paribas Cardif had picked up 26 per cent in the life insurance arm of the nation's largest lender SBI in 2002. BNP Paribas India chief executive and country head Joris Dierckx told PTI that SBI has been in discussions with them but they have decided not to increase the stake as the company is planning the IPO. "We will probably take a call closer to the share sale," he added.
When contacted, SBI chairperson Arundhati Bhattacharya told PTI that the bank is yet to formally hear from BNP. Last month she had told this agency that they were still in talks with the French partner to increase the stake.
The amended FDI rule allows 49 per cent foreign holding in an insurance firm. Though the law was amended two years ago, only a few companies like Reliance Life and Liberty Videocon saw their foreign partners increasing their stake to 49 per cent.
When asked whether BNP move will have any material impact on the planned IPO, Bhattacharya said "no".
Early December, State Bank of India had sold 3.9 per cent of its stake in SBI Life to global private equity major KKR and the Singaporean sovereign fund Temasek Holdings for Rs 1,794 crore or USD 264 million, valuing the third largest private life insurer at around Rs 46,000 crore.
After this stake sale, SBI's take in the arm came down to 70.1 per cent from 74 per cent while BNP Paribas Cardif still holds 26 per cent.
KKR and Temasek picked up 1.95 per cent each, while the board had initially approved 5 per cent pre-IPO dilution.
Last month, she had ruled out further stake dilution in the life insurance arm before the initial public offering that is likely to to happen over the next 12-18 months.
"We want to retain 50.1 per cent control in SBI Life Insurance even after the IPO. So, there is no likelihood of any further stake dilution before the share sale, which I hope should be completed over the next 12-18 months," she had said.
But Bhattacharya had said, by the time of the IPO, SBI Life would be most valued private sector life insurer, ahead of the present leaders HDFC-Max and ICICI Prudential.
SBI is planning to shed 10 per cent through the share sale process.