SBI Life to come for IPO


The second biggest private insurance company in India SBI Life is coming up for IPO. RDA gave permission for this. The company has a target of procuring 7000 crores through this IPO. This is the first time that an insurance company is trying to procure such a big amount. The book leading managers for these are going to be PNB Paribas, Kotak Investments Bank and Axis Capital. Second largest private insurance company SBI Life is the second largest private insurance company after ICICI Prudential Life Insurance and is going to sell 12% stake through this. Two anonymous persons related to the SBI Life said that the company is planning to raise Six to Seven thousand crores through this. They said that the company will put forth the proposal documents to SEB in a few weeks. SBI share 70%SBI Life is formed by the duo SBI and PNB Paribas Cardiff and SBI has 70. 1% share and BNP Paribas 26%. Private equity company KBR, Singapore public investment company Temasek have 1.95 each. Of the 12% proposed stake sale, while 8% will be that of SBI the remaining Four is of the remaining.

During the last financial year, KBR and Temasek brought 1. 95% each at 460 rupees each share. This made the total market value of the company 46 thousand crores. Huge interest on this Pouring the next few years, the company’s income will grow at least 17% per year. SBI is spread across India and especially, it has a very large presence in the rural areas. So, there may very high interest on this IPO, says Haitang Securities research head Santhosh Singh. During the last financial year, SBI had the largest growth rate among its peers. It has the highest income last year through premiums. According to IRA data, the company’s first year premium income during 2016-17 showed 43% rise at 10,145 crores. Total premium income showed 33% rise at 21,015.13 crores.

Estimating the market value of an insurance company appraisal mode is taken. In this, embedded value and constructive value is estimated. Embedded value is done considering the trade value of the company so far. The constructive value estimates the future trade capacity of the company. Apart from this, company’s market share, business growth, portfolio, distribution network is also considered while estimating company’s value. First insurance company ICICI Prudential Last year, ICICI Prudential managed to raise 6056 crores through IPO marking itself as the first insurance company to list in the open market. While the market value of the company during listing was 48 thousand crores, the embedded value stood at 16,184 crores. The present market value stands at 70,239.46 crores. By March 2016, SBI Life embedded value was 12,999 crores. According trade experts and bankers, it can be 15,200 crores at present. Per the year ending on March 31, the net profit of SBI Life stood at 954.65 crores. This is 10. 9% more when compared to last year’s at 861.30.