INSUBCONTINENT EXCLUSIVE:
MUMBAI: Five investment banks including Kotak Investment Bank, ICICI Securities, JM Financial, Edelweiss and EY are looking to participate
in the stake sale process of SBI General where SBI is looking to sell 4 per cent before the IPO expected by end of the fiscal year.
The
stake sale in general insurance is likely to happen by the end of the current year.
“We are in the process of finalising a banker and the
process has to be completed within a week,” said Dinesh Khara State Bank of India
“We are selling 4 per cent stake for price discovery
SBI General has wiped out losses and it is the right time to do a deal.”
ICICI Prudential, HDFC Life, SBI Life and ICICI Lombard General
had sold a token stake to discover value before the listing on the exchanges
The stake sale will be largely for shareholders to unlock value
SBI General Insurance Company, which began its operations in 2010, is a 74:26 joint venture between the State Bank of India and Insurance
In December 2016, IAG had exercised an option to raise its stake to 49 per cent in the next two years
IAG paid Rs 542 crore for a 26 per cent stake in the joint venture, which started in 2010.
Its gross written premium rose by 36 per cent to
Rs 3,545 crore in 2017-18 compared to the previous fiscal
Valuation of general insurance companies is based on gross written premium, profitability and net worth
In recent listings, investors have given them a multiple of eight times to book and three times the gross written premium
Going by ICICI Lombard’s market capitalisation of Rs 35,000 crore, SBI General could be valued anywhere between Rs 11,000 crore and Rs
