SBI Life has filed a draft red herring prospectus with the Securities and Exchange Board Of India (SEBI) for an initial public offering to sell around 120 million equity shares of face value Rs 10 each. After ICICI Prudential Life Insurance listed on the stock exchange last year, SBI Life will be the second in the insurance space to go public, and most probably the largest IPO in the insurance space.
Though it has not mentioned how much the IPO would raise, it is being said that they might raise as much as Rs 7000-9000 crore. SBI, the largest bank in the country by assets, is selling 8 per cent stake or 80 million shares in the unit as part of the IPO and their joint venture BNP Paribas Cardif is selling upto 4 per cent stake or 40 million shares. Of the total shares issued, 12 million are reserved for SBI shareholders and two million for State Bank employees which will be offered to them at discounted price.
SBI Life was established in 2001 by State Bank and BNP Paribas Cardif as a joint venture. Book Running Lead Managers handling the issue are Axis Capital Limited, BNP Paribas, Citigroup Global Markets India Private Limited, Deutsche Equities India Private Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, JM Financial Institutional Securities Limited and SBI Capital Markets Limited.
SBI Life reported a net profit of Rs 955 crore in 2016/17, a growth of 13 percent compared to the previous year's net profit of Rs 844 crore. It has also increased its market share of new business premium generated among private life insurers in India, from 15.87 per cent in 2014/15 to 20.04 per cent in 2016/17 as per Crisil report. Between 2014/15 and 2016/17, SBI Life's new business premium generated increased at a CAGR of 35.45 percent, which is the highest among the top five private life insurers (in terms of total premium in 2016/17) in India as per Crisil report.
As of June 30, 2017, SBI Life had a product portfolio of 37 individual and group products, including a range of protection and savings products to address the insurance needs of diverse customer segments. SBI Life's individual products include participating products, non-participating protection products, other non-participating products and unit-linked products, which contributed 10.77 per cent, 0.95 per cent, 1.69 per cent and 50.36 per cent, respectively, of its new business premium in 2016/17. While SBI Life's group products include credit life group protection products, other group protection products, group fund management products and other group products, which contributed 2.72 per cent, 1.14 per cent, 31.73 per cent and 0.65 per cent, respectively, of their new business premium in 2016/17.
Then, in fiscal 2016/17, SBI Life had 13th month and 61st month persistency ratios of 81.07 per cent and 67.18 per cent, respectively, with its 61st month persistency ratio being the highest among the top five private life insurers (in terms of total premium) in India as per Crisil report.