SBI Life Insurance, a subsidiary of the country’s largest public sector lender State Bank of India, will launch its initial public offer on September 20.
The price band for the IPO has been fixed at Rs 685-700 per share, SBI said in a regulatory filing on Tuesday. The offer, which will remain open for three days, will see promoters offloading up to 12 crore shares of face value of Rs 10 each through the offer of sale route, the filing added.
SBI and its joint venture partner BNP Paribas Cardif SA will sell 8 percent and 4 percent of their stakes, respectively in the life insurance firm. At the upper end of the price band, SBI will fetch Rs 5,600 crore from its stake sale, while BNP Paribas Cardif will earn Rs 2,800 crore.
While 50 percent of the offer will be reserved for qualified institutional buyers on a proportionate basis, up to 60 percent of the QIB portion will be allocated to anchor investors on a discretionary basis, SBI Life Insurance’s draft prospectus had said. Not less than 15 percent of the shares on offer will be allocated to non-institutional Investors and not less than 35 percent will be made available to retail investors. Eligible employees will be given shares at a discount of Rs 68, the draft prospectus had added.
The objects of the issue is to achieve the benefits of listing and enhance the “SBI Life brand name and provide liquidity to the existing shareholders.”
SBI Life Insurance has hired JM Financial Institutional Securities Ltd, Axis Capital Ltd, BNP Paribas, Citigroup Global Markets India Pvt. Ltd, Deutsche Equities India Pvt. Ltd, ICICI Securities Ltd, Kotak Mahindra Capital Co. Ltd and SBI Capital Markets Ltd to manage the share sale.
SBI Life will be the second pure-play life insurance firm to go public after ICICI Prudential Life Insurance listed in September 2016.