Public sector lender Bank of India on Friday offered to sell a 25 per cent stake in its joint venture company Star Union Dai-ichi Life Insurance Co Ltd for approximately Rs 1,106 crore ($159.87 million), as per media report.
"Bank of India has floated a Request for Proposal (RFP) for sale of equity stake in our joint venture company i.e. Star Union Dai-ichi Life Insurance Co Ltd," the bank said in a filing to the Bombay Stock Exchange.
Star Union Dai-ichi Life Insurance Co. Ltd. (SUD Life) is a joint venture (JV) of Bank of India, Union Bank of India and Dai-ichi Life, a leading life insurance company of Japan. With a robust collective network of Bank of India and Union Bank of India's over 11,000 branches, SUD Life caters to more than 6.4 crore customers.
Bank of India to sell 6.49 crore shares, or 25.02 per cent stake, in Star Union Dai-ichi Life Insurance Co at a floor price of 170.50 per share," it said.
BoI has invited non-binding proposal/bid for purchase of the said equity shares by April 12, it said in the filing.
At the floor price, the lender is likely to raise over Rs 1,106 crore from the stake sale. The disinvestment is a part of the bank's strategy to offload some of its non-core assets and raise funds.
The state-owned bank holds a 28.96 per cent stake in the joint venture, while Union Bank of India and Dai-ichi Life owns 25.10 per cent and 45.94 per cent, respectively.
Following the announcement, shares of the bank slipped into negative terrain and closed at Rs 100.90, down 0.10 per cent. During the choppy trade, the stock touched an intra-day high and low of Rs 102.40 and Rs 99.55, respectively.
According to data available with exchange, as much as 5.16 lakh shares have changed hand over the counter as compared to two-week average of 9.34 lakh shares.
Edited by Chitranjan Kumar