Shares of SBI Life Insurance fell over 6 per cent on Tuesday after PE firm Carlyle Group sold shares worth Rs 2,814 crore through block trades. Data from the NSE showed that CA Emerald Investments, the investment firm of Carlyle Group, sold 30 million shares at Rs 938 apiece. Shares closed at Rs 936, down Rs 63 or 6.3 per cent over Monday. The stake was bought in varying quantities by a bunch of institutional investors.
The PE firm had acquired the stake in March from BNP Paribas for Rs 5,445 crore. Since them, shares had rallied more than 50 per cent, along with other insurance firms. “The life insurance industry has strong growth potential, on the back of favourable demographics and an increasing focus on financial savings,” Sunil Kaul, MD of the Carlyle Asia Buyout advisory team, had said while buying the stake in March.
State-owned SBI currently owns 57.6 per cent stake in the company, while BNP Paribas holds 5.2 per cent stake. “We raise our price targets on Indian life insurance stocks by 15-30 per cent, recommending SBI Life and ICICI Pru Life as top picks. Our positive stance on the space is undented by the 50-65 per cent rally year to date. We see the industry as still in the early stages of a multi-year growth story. We expect the top 3 private life companies to double annual new business value (NBV) in four years, extending to a 21-26 per cent CAGR over the next decade,” said JP Morgan in a note dated November 10.