SBI Life raises Rs 2,226 crore from anchor investors

Country's largest private sector life insurer SBI Life Insurance Company has allotted 31.8 million shares worth Rs 2,226 crore to 69 anchor investors. The allotment was made at Rs 700 apiece, the top-end of the IPO prove band. 

SBI Life's Rs 8,400-crore IPO opens on Wednesday and will close on Friday. 

Some of the anchor investors are Blackrock, Canada Pension, Govt of Singapore, Aranda, Abu Dhabi Investment Authority, HSBC, Wells Fargo, Kuwait Investment Authority and Rochdale. 

The price band for the IPO is Rs 685 to Rs 700 per share.

“At Rs 700, the issue is offered at 4.2 times its embedded value of Rs 16,538 crore. This is a little higher than 3.8 times for ICICI Prudential. We believe the premium valuation for SBI is justified due to its higher incremental market share gain, and hence we recommended investors to subscribe to the issue with long-term perspective,” said a note by Angel Broking

The entire IPO comprises of an offer for sale by State Bank of India and BNP Paribas. SBI is selling shares worth Rs 5,600 crore and BNP is selling shares worth Rs 2,800 crore in the IPO. Following the IPO, the promoter holding in SBI Life will drop from 96 per cent to 84 per cent.

SBI Life's offering is biggest since Coal India's Rs 15,300-crore IPO in October 2010.