SBI Life Insurance IPO subscribed 3.58 times

The initial public offer of SBI Life Insurance was subscribed 3.58 times by Friday, the concluding day of the issue, with investors bidding for 315.4 million shares against the 88.2 million shares on offer.

The issue received bids for 266.3 million shares from qualified institutional buyers against their quota of 21.2 million shares.

High net worth individuals on the other hand bid for 11.1 million shares against the 15.9 million shares reserved for them, bidding 0.7 times.

Retail investors bid for nearly 0.85 times or 31.4 million shares of the 37.1 million shares reserved.

Employees, who had 2 million shares reserved for them, bid for 2.08 million shares. SBI shareholders, who had 12 million reserved shares, bid for 4.54 million shares.

SBI Life, India's largest private life insurer, on Tuesday raised Rs2,226 crore from 69 anchor investors.

SBI Life had planned to raise around Rs8,400 crore from the IPO. The company has set a price band of Rs685-Rs700 per share for its IPO, and when calculated at the upper band of the issue price, the company will be valued at around Rs70,000 crore.

The IPO comprises of an OFS of up to 80 million equity shares by promoter State Bank of India and up to 40 million equity shares by BNP Paribas Cardif. The offer constitutes 12 per cent of the post offer equity share capital, which will include 8 per cent by the State Bank of India (SBI) and 4 per cent by BNP Paribas Cardif.  SBI will get Rs5,600 crore by selling 80 million equity shares, while the sale of 40 million shares will fetch BNP Paribas Cardif Rs2,800 crore.

For the shareholders of SBI, 10 per cent of the issue is reserved and 2 million equity shares are reserved for the employees of SBI Life Insurance Company.

Established as a joint venture between the State Bank of India and BNP Paribas Cardif in 2001, SBI Life Insurance Co is India's largest private life insurer in terms of new business premium generated in each fiscal year since 2010. Currently, SBI holds 70.1 per cent in SBI Life, while BNP Paribas Cardif has 26 per cent and the remaining 3.9 per cent is owned by KKR and Temasek Holdings.

Now, 12 per cent is being offloaded and after the IPO, SBI and BNP Paribas Cardif will hold 62.1 per cent and 22 per cent, respectively.

In December last year, SBI Life had sold 3.9 per cent of stake to KKR and Temasek Holdings for Rs1,800 crore, pegging its value at Rs46,000 crore.

Embedded Value of SBI Life at the end of March 2016 was Rs13,000 crore, which increased to over Rs16,538 crore at the end of financial year 2016-17.

Total assets under management of SBI Life stood at Rs97,737 crore in the last financial year, while company earned a net profit of Rs955 crore in FY2017, up from Rs861 crore in FY2016.