SBI Life Insurance, which has filed the draft red herring prospectus (DRHP) with Securities and Exchange Board of India (Sebi), is likely to bring out the largest initial public offering (IPO) in the insurance space. Sources said that the insurer could raise as much as Rs 8500-9000 crore from the IPO.
Once listed, this would be the second life insurer after ICICI Prudential Life Insurance to be listed on the stock exchanges.
This includes an initial public offer of up to 120 million equity shares of face value of Rs 10 each through an offer for sale by State Bank of India and BNP Paribas Cardif where each will be selling up to 80 million equity shares and up to 40 million equity shares, respectively.
Further, it also includes a reservation of up to 2 million equity shares (constituting up to 0.2 percent of the post-offer paid-up share capital) for purchase by eligible employees at a discount on the offer price and a reservation of up to 12 million equity shares (constituting up to 10 percent of the offer) for purchase by SBI shareholders.
The book running lead managers to the offer are JM Financial Institutional Securities Limited, Axis Capital Limited, BNP Paribas, Citigroup Global Markets India Private Limited, Deutsche Equities India Private Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited and SBI Capital Markets Limited.
In FY17, SBI Life's embedded value was Rs 16,537.9 crore as of March 31, 2017. Their value of new business was Rs 1036.8 crore.
SBI Life was established as a joint venture between the State Bank and BNPPC in 2001. In FY17, they had 13th month and 61st month Persistency Ratios of 81.07 percent and 67.18 percent, respectively.
Further, their death claims settlement ratio improved from 92.33 percent in FY15 to 97.98 percent in FY17.