State Bank of India (SBI), the country's largest lender, has scrapped its plan to list its general insurance arm on domestic bourses as there is no need for additional capital now, chairman Rajnish Kumar has reportedly said.
Earlier, the public sector lender was looking for an initial public offering (IPO) for SBI General Insurance in FY20. A joint venture between SBI and Insurance Australia Group, SBI General Insurance was recently valued at over Rs 12,000 crore.
SBI General Insurance, which started operations in 2010, is a joint venture between State Bank of India and International Pty Ltd (IAG). SBI owns 70 per cent in the venture while IAG holds 26 per cent. SBI General Insurance had reported 11.3 per cent year on year (YoY) growth in profit before tax at Rs 470 crore for the financial year ended March 2019.
Replying to a question if the IPO for general insurance will happen next fiscal, Kumar said that there is no need for capital, reported news agency PTI.
Speaking to reporters, Kumar, however, said that SBI Card listing will happen in the March quarter of this fiscal, citing that investor interest in the cards business is very high.
The IPO will be launched in the January-March quarter of the current fiscal and based on the valuation arrived at, SBI will take a call on the stake sale, he reportedly said.
SBI Cards & Payments Services is a joint venture between the SBI and The Carlyle Group, in which the national lender currently owns 74 per cent stake. Kumar said that its foreign partner can also choose to dilute its stake through the IPO.
In a separate development, SBI on Sunday opened its fourteenth branch in Ladakh to expand its network in the underserved regions in the country. The new branch is located in Diskit, Nubra Valley, in Leh district.
Inaugurating the new branch, Rajnish Kumar said that it is a proud moment for SBI to launch a branch for the residents of Diksit who can now get access to all their banking needs without any stress of travelling to far-off places.
"We will continue empowering citizens of every nook and corner by helping them become financially confident and independent," Kumar said.
Edited by Chitranjan Kumar