Carlyle acquires 9% stake in SBI Life
MUMBAI: In one of the biggest deals in the Indian life insurance sector in recent years, global privateequity (PE) giant the Carlyle Group on Friday said it has acquired a 9% stake in the listed insurer SBI Life Insurance Co. Ltd from BNP Paribas Cardif.
According to SBI Life Insurance’s closing stock price on Friday, the 9% stake is worth around ₹5,500 crore.
Shares of SBI Life closed at ₹612.25 apiece, up 5.47%. The last major deal in the life insurance space was in August 2018, when a consortium of West bridge Capital, Madison Capital and Rake sh Jhunjhunw ala agreed to acquire Star Health and Allied Insurance Co. Ltd for around ₹6,000-6,500 crore.
Sunil Kaul, managing director and head of South-East Asia of the Carlyle Asia buyout advisory team, said, “The life insurance industry in India has strong growth potential thanks to favourable demographics and an increasing focus on financial savings.
SBI Life, led by a strong man- agement team, is helping deliver this promise in the life insurance space and is well-positioned to further benefit from industry trends.”
Following this transaction, French insurer BNP Paribas Cardif and Carlyle now own 12.8% and 9% of the company, respectively, while State Bank of India (SBI) remains the majority shareholder with a 62.1% stake.
Sanjeev Nautiyal, managing director and chief executive of SBI Life, said, “We are delighted to have Carlyle, a highly-regarded long-term investor, as a shareholder of the company. Carlyle’s trust in the company will further strengthen our resolve to enhance our leadership position in India’s life insurance industry.”
Mint reported in September last year that BNP Paribas is looking to sell part of its stake in SBI Life. ]
The stake sale was part of a move to bring down the stake held by promoters to 75%, as per Securities and Exchange Board of India (Sebi) laws for listed companies, which mandatemin-imum public shareholding of 25% within three years of listing.
SBI Life went public in September 2017 in an initial public offering (IPO) that saw the two promoters—state-run lender SBI and BNP Paribas—collectively sell 12% stake, with SBI selling 8% and BNP Paribas Cardif 4%. The IPO valued the company at ₹70,000 crore.
The Carlyle deal comes at a time when PE interest in the insurance sector is high, with investors buying both minority and majority stakes in a host of insurers.